(ANSA) - L'Aquila, May 17 - Premier Matteo Renzi said Tuesday that the European Commission has granted Italy's request to use the clause allowing flexibility in the application of European budget rules. "In the next few hours an exchange of letters between the European Commission and (Economy) Minister (Pier Carlo) Padoan, who has done an extraordinary job, will come out and we'll be able to see that the element of flexibility has been recognised," Renzi said during a visit to the city of L'Aquila in the central Abruzzo region.

The European Commission gave the green light for Italy to have a budget flexibility margin of 0.85% of GDP in 2016, but it has also told Rome that it needed an effort on the deficit of over 0.5% in 2017 and 2018, according a letter from Brussels to Rome, European sources said on Tuesday. It also called on Italy to avoid a significant deviation from this objective and said it would verify the situation in the autumn, the sources said.

"Europe has recognised a further element of (budget) flexibility," Renzi added later in the day. "It is still less than I would have wished for but it is an important fact, recognition for the whole country. We have achieved a significant, important accord. It's not the solution to all ills but it affirms a principle: on flexibility, Europe is there".

Renzi stressed that he will respect the will of people after the October referendum on his government's Constitutional reform to overhaul Italy's political apparatus. Renzi said staked his career on the reform, which includes the controversial transformation of the Senate into a leaner assembly of local government representatives with limited powers. He has said he will quit politics if it is not ratified. "The referendum is a beautiful thing," he said. "The people will say yes or no and we'll respect the will of the Italian people".

Renzi added that the world is going through a "time of fear" and linked this to the rise of Donald Trump. "We are experiencing an a very special time on the international arena," Renzi said during a visit to L'Aquila to sign the 'Masterplan' for the central Abruzzo region featuring 77 projects. "If on August 25 during my last visit to Aquila they'd have told me that a phenomenon like Trump would occur in the American elections, I would not have bet a euro on it... It is a time of fear, not of courage".

