BERLIN, May 26 (Xinhua) -- A senior policymaker of the Christian Democratic Union (CDU) in Germany has warned the country's federal government on Friday not to give in to blackmailing attempts by the new Italian government in the context of proposed eurozone reforms.
"The federal government cannot allow itself to be blackmailed and certainly cannot agree to assume joint liability on behalf of Germans savers (for Italian debt) in the framework of a European deposit insurance scheme," Wolfgang Steiger, secretary general of the CDU economics council, wrote in the magazine "Focus".
Italian President Sergio Mattarella has recently nominated the little-known civil lawyer and academic Giuseppe Conte to lead a coalition government formed by the populist parties Lega Nord (the Northern League) and MoVimento Cinque Stelle (Five-Star Movement). Conte is a political novice chosen by the two parties as a compromise candidate who is expected by observers to occupy the post of prime minister in a largely symbolic fashion.
While Conte has himself come under attack for allegedly making exaggerated claims on his resume, German officials and opposition politicians are since publicly expressed concern that the technocrat will fail to act as a curb on the Eurosceptic sentiment in the new Italian cabinet.
CONCERN: EUROZONE EXIT?
According to Steiger, Lega Nord and MoVimento Cinque Stelle were already scheming to achieve a mutualisation of sovereign debt in the eurozone. This "dangerous" game could ultimately cause "the end of the Euro," Steiger wrote.
Similarly, the Bavarian governor Markus Soeder (CSU) told the newspaper "Passauer Neue Presse" that Berlin would have to do "everything in its power to bring Italy back to financial reason." Lega Nord and MoVimento Cinque Stelle have both blamed the poor economic performance of Italy during recent years on the strict budgetary rules of the European monetary union and have vowed to end austerity in the highly-indebted country by lowering taxes dramatically and introducing a basic minimum income.
The new Italian government denies having any plans to leave the eurozone and has emphasized that its coalition agreement merely lists a goal of achieving a voluntary debt reduction with its creditors. However, Lega Nord is also pushing for the nomination of the Eurosceptic economist Paolo Savona as finance minister. Savona has described the eurozone as a "German cage" and argued that Italy needed to be prepared for the eventuality of an eurozone exit if it was left with no other option.
Peter Bofinger, a member of the independent council of official economic advisers to the German government, highlighted the growing risk of a potential exit of Italy from the eurozone on Friday. Speaking in the newspaper "Saarbruecker Zeitung", Bofinger said that such a development would be "problematic" for Germany too, as "other countries could follow suit."
Bofinger cautioned that any confidence that Germans savers could actually benefit from such a development were misplaced. "The consequences of a euro-crash for Germany would be lower corporate profits, lower wages and hence also extreme losses of taxation revenue for the government," he said.
