On Wednesday Europe’s leaders will gather in Milan for their on-off-on-again summit on jobs and growth.
Expectations are low. The meeting is very much the idea of the Italian Prime Minister, Matteo Renzi, wanting to demonstrate to a domestic audience that he is at the forefront of the struggle to cut Europe’s unemployment numbers.
Even as the leaders discuss how to boost growth, what will be impossible to disguise are the deep divisions within the eurozone – and that is Europe’s central drama this autumn.
Germany has proudly announced that it is running a balanced budget. In contrast France and Italy are not just struggling with their budgets; they are threatening to flout the EU’s budget rules. “France makes its own rules,” says its Prime Minister Manuel Valls. The European Commission may well challenge that assertion.
Let’s take the case of Italy. It has torn up its own forecasts. Growth this year will be -0.3%, compared with a predicted figure of 0.8%. Growth next year will be a tepid 0.6%.
Italy’s level of industrial production has fallen by a quarter in the past six years. Unemployment remains stubbornly high at near 12%. Its budget deficit is increasing, although the government says it will stay under 3%.
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