Angela Merkel declared that she was "very impressed" by the plans of the new Italian government.

Initially the Chancellor spoke about the structural change Italy is seeing, and expressed her respect for the planned programme of reforms. "This is a message that we all welcome," said Angela Merkel. She wished the new government luck and stamina.

The Chancellor reported that the two sides had together gone through the individual facets of the programme. She mentioned the reforms of the labour market and administration, as well as incentives to boost domestic demand.

Italy has clearly not lost sight of the Stability and Growth Pact, and its two components: growth and employment on the one side, and stability and the provisions of the fiscal compact on the other. The Chancellor pledged Italy Germany’s support for the Presidency of the Council of the European Union, which it is soon to assume.

Conflict in Ukraine

The Chancellor also mentioned the situation in Ukraine, the deliberations of the EU foreign ministers and the sanctions agreed on. "This was not our intention; we would like to see talks and diplomatic solutions." These steps were unavoidable though, given the clear violation of international law through the Crimean referendum, she added.

"I am glad that Europe has demonstrated unity on this point," said the Chancellor. Equally, Europe is unified in its efforts to get an OSCE mission off the ground and in its continuing efforts to initiate diplomatic talks. She pointed out that talks of this sort are the key to resolving the conflict.

Cooperation with Italy

Italy and Germany can look back on very close and long-standing cooperation. In their dialogues, the individual line ministers will be translating this into specific terms. Germany is Italy’s most important trading partner: 12.5% of Italy’s exports are destined for Germany, and 14.5% of imports come from Germany.

As a result of the economic and euro crisis, Italy’s sovereign debt rose from a rate of 105.7 per cent of the country’s gross domestic product in 2008 to 116.4 per cent in 2009 and 127 per cent by the end of 2012. Provisional figures indicate that it rose further in 2013 to 132.6 per cent of GDP.

In the wake of the crisis, unemployment in Italy has risen to 12.9 per cent (January 2014). The pattern varies widely from one region to another. (Youth) unemployment is significantly higher in the south than in the north of the country.