Italy is planning to launch a fightback against the EU policy of austerity being led by Angela Merkel's Germany. The country's president Matteo Renzi insisted he would not let Brussels "drag us into recession" as he pleaded for European leaders to loosen the purse strings.
Germany - the EU's biggest economy - has kept a close eye on eurozone finances and was behind restrictive Brussels rules on spending and budget deficits which is squeezing the life out of southern European economies.
As a result Mr Renzi is fighting off a growing eurosceptic movement in Italy, whose economy has floundered for decades and is the same size now as was when the country joined the euro 15 years ago.
The Italian prime minister is struggling to constrain a surge in anti-Brussels feeling which could cost him his premiership when Italians vote in a referendum on domestic reforms in October.
Mr Renzi has said he will resign if he loses the vote amid fears the weary Italian public will use it to give the establishment in Rome and Brussels a kicking. If he goes there will likely be a fresh general election with the right-wing, eurosceptic Five Star movement set to make huge gains in such an eventuality, according to the latest polls.
In a desperate plea to Mrs Merkel and EU chief Jean-Claude Juncker to ease their iron grip of austerity, Mr Renzi said today: “Brussels can’t drag us into an economic recession. We want more flexibility to change and expand our budget law."
His comments were echoed by Italy's chancellor, Carlo Calenda, who added: “We will ask Europe for more flexibility. This is the toughest moment we have faced in the last 50 years."
Italy's economy has been in the doldrums for decades like many other Mediterranean countries, with job creation and living standards being suppressed by a euro currency which has fuelled a German exports boom.
The latest GDP figures from Rome show the country's economy did not expand at all in the second quarter of this year, after growth of just 0.3 per cent between January and March.
Italian manufacturing has slumped due to decreasing domestic demand whilst the country's banks, which are teetering on collapse, have been badly hit by the financial contagion following the Brexit vote.
Meanwhile, Italy's public finances are in a dire state following years of Berlin-imposed austerity, with government debt running at an astonishing 2.48 billion euros (£2.15bn), which is 135 per cent of GDP.
Mr Renzi's arguments against Brussels austerity are finding an increasingly sympathetic audience across the continent, where falling living standards, spiralling unemployment and growing poverty are fuelling anti-EU sentiment.
Now the leaders of France, Italy, Spain, Portugal, Cyprus and Malta are planning to meet in Athens next month to forge a new anti-austerity alliance with the aim of wrestling back control of the ECB, which sets Eurozone fiscal policy, from Berlin.
It is being headed up by Greek premier Alexis Tsipras, who has frequently clashed with both Mrs Merkel and Brussels over the crippling austerity which has brought his country to its knees.