07/21/2014 01:51 pm ET Updated Sep 20, 2014

Can Matteo Renzi Move Mainstream Europe?


BERLIN -- An old saying in Rome has it that the favorite candidate always enters the conclave as the next pope but exits as a mere cardinal. Matteo Renzi, Italy's maverick prime minister, is Europe's man of the hour; but the six-month rotating EU presidency which Italy kicked off earlier this month may leave him severely diminished, unless he fulfills the promise of his leadership with tangible results.

In a little over a hundred days at the helm of his country's government, the 39-year-old former mayor of Florence has taken Italy by a storm. He promised one major reform every month. Some of these reforms eluded Italy's calcified institutions for decades. He may be just about to deliver on the first one, by adopting sweeping changes in the electoral system and the constitution. In the meantime, he provided clever placebos, in the form of an 80 euro tax cut for the country's lowest earners. He even ordered the sale -- on eBay -- of a few dozen auto blu, the gas-guzzling sedans used by state officials and symbolizing the privileges of Italy's political class.

For a nation corroded by clientelism -- and always expecting the arrival of a messiah that will turn the tide -- it is not entirely surprising that Renzi's Democratic Party secured a remarkable 41 percent of the votes at the latest European elections, more than any other party. Yet, critics argue that his still limited record, combined with an extraordinary rhetorical flair, smacks as populism-lite. His economic agenda, they note, is in fact much in line with that of his predecessors and is largely dictated by Europe.

So it is in Europe that Renzi is taking his biggest chances yet. He has decried a Europe that saves ailing banks but lets boat people arriving at Italy's southern shore die by the thousands. He is engaging in a stubborn clash to nominate his government's foreign minister as the next EU's foreign policy supremo, despite the objections raised by other EU capitals regarding the candidate's inexperience and Italy's cosy relations with Russia.


Above all, Renzi wants to be able to carry out the kind of public investments that will restore growth and jobs in Italy's anaemic economy. While professing to uphold the commitments of previous governments, he has been advocating more flexibility in the way Brussels calculates budget targets. In presenting the Italian EU presidency at the European Parliament earlier this month, he made sure to point out that a decade ago Germany broke the rules that it now demands its European peers to respect. The hawks of fiscal discipline, from Bundesbank President Jens Weidmann to the new EU economic affairs commissioner Jyrki Katainen, have all politely rebuked Renzi's pleas for flexibility but received piqued replies from Rome in return.

The one occasion so far when the Italian government has remained muted is also the most telling to weigh the stakes of Renzi's challenge in Europe. In a recent speech in London, Mario Draghi, the president of the European Central Bank, argued that: "There is a strong case for us to apply the same principles to the governance of structural reforms as we do to fiscal governance." This would entail, he continued, "a set of structural criteria that had to be met to enter the euro area and then respected once inside."


On the face of it, Draghi's argument crystallizes much of what Renzi presumably stands against. The young prime minister has repeated ad nauseam that Italy knows perfectly well what to do, without the need to be told from the EU. To make reforms a legally binding commitment was an old German idea that Southern member states have long opposed. The very notion that there exists a single recipe for "structural reforms," whether they be liberalizations or job-market changes, that is replicable in different social and political contexts, remains highly questionable.

Yes, the studious silence which met Draghi's proposal is not only a sign of the respect commanded by the Italian-born ECB boss, but it is also a litmus test of the level at which Renzi is operating and where he may be able to apply real change. For Renzi does not repudiate EU orthodoxy on reforms. His ecumenical centrism is not revolutionary; in fact, beneath the sound bites, it is not even particularly creative.

Renzi's most important task is to repackage mainstream politics into a message of opportunity and accountability. He must show that the real gaps in Europe are not between North and South, or creditors and debtors. Once a government is committed to reform, the more profound rift is within each country. It concerns, on the one hand, the need for a meritocratic administration of public goods, for which the EU was once respected and, on the other hand, voters' growing cynicism as made apparent by the rise of Eurosceptic populism.

In this, Renzi is the ideal complement to German Chancellor Angela Merkel, Europe's only other champion. But he needs to use his political capital wisely. Bickering with the high priests of EU austerity may be warranted if it materializes in concrete proposals, but not if it becomes a polemical distraction from the far more consequential job of changing the discourse of European politics -- and possibly its course.