Italy’s finance minister has warned that time is running out for Europe’s tottering economies to avoid stagnation.

Speaking on the eve of a national strike in Italy and after figures showed the country’s industrial production fell yet again in October, he said: “There isn’t much time. Europe is at a fork in the road. One path leads to stagnation; the other to growth that we sorely need.”

In a frank interview with the Guardian and other European news organisations, Pier Carlo Padoan attacked the European Investment Bank (EIB) for worrying more about its credit rating than about promoting growth and revealed he had been discussing with Brussels new rules to encourage government spending that underpinned structural reform.

On Thursday in Italy there were violent clashes as millions of workers joined the nationwide stoppage in protest at the government’s employment law reforms.

Padoan’s message for them was that there would be no U-turns. Earlier this month, parliament approved a bill giving Matteo Renzi’s government a free hand to introduce by decree greater flexibility into the labour market.

But until now it has been unclear whether Italy’s left-right coalition, under pressure from the left wing of Renzi’s Democratic party, would use its powers to the full. Padoan was unequivocal, saying: “The decrees are already prepared and they are such as to render extremely clear the direction: not to water down. No reform is going to be watered down.”

He gave a guarded welcome to the plan sponsored by European commission president Jean-Claude Juncker to inject extra investment cash into the European economy from June.

But Padoan warned that “June is a long way off for the time-scale of the economy”, saying something had to be done in the meantime. One possibility was to mobilise the EIB.

He added: “The problem with the EIB, as you know, is that it has a very prudent attitude to investment because, to protect its triple A [rating], it does not want to take on, let’s call it, excessive risk.

“In my opinion – and not just mine – the ‘Bank of Europe’, as they love to call themselves, could be a little bit more aggressive; a bit more proactive.”

Under the Juncker plan, which has been met with widespread scepticism, the commission and the EIB would provide guarantees of €21bn (£16.7bn) to raise €65bn in loans for selected projects, in turn attracting private capital to bring the total to €315bn.

But Padoan warned that not all investment projects were good. He said: “I would like a European mechanism that takes on the task of evaluating European investment projects. It could be the EIB.”

The finance minister also argued for discrimination between different kinds of spending when assessing whether countries were complying with the government borrowing limits mandated in the eurozone. There were “items of public expenditure that are probably not classified as investment, but are important”, he said.

Italy’s 2015 budget offered an example: provision for welfare spending intended to ease the passage of the Renzi government’s controversial labour market reform. While this was not investment this did contribute to long-term growth.

“I’d be very glad if this qualitative aspect were explicitly recognised in the evaluation of countries’ public finances,” said Padoan.

He said he had not yet raised the issue formally in a meeting of the economic and financial affairs council (Ecofin). But he had spoken about it with colleagues, and discussed it with Jyrki Katainen, the commission vice-president responsible for the economy.

Next to Padoan’s desk, in the vast office allocated to Italian finance ministers, there is a large crucifix and, below it, two trading screens. On one is displayed the indicator Italians know as lo spread, the yield gap between Italy’s benchmark government bonds and Germany’s.

It is a measure of the market’s confidence in Italy’s ability to pay off its vast public debt of more than 130% of GDP, and Padoan confessed that he monitored it constantly. Until last week, the screen beside his desk displayed an encouragingly steep drop from left to right.

By 5 December, it was below 1.2 percentage points. But since then it has gained almost a fifth of a point as storm clouds have again gathered over the eurozone.

Markets remain spooked by the prospect of an early general election in Greece and a victory for the country’s leftists, Syriza, whose leader Alexis Tsipras has mooted an orderly restructuring of his country’s debts. While disclaiming any desire to interfere in the internal affairs of another country, Padoan – a former IMF official – had a warning for him.

“To think that it is possible to have an orderly restructuring of [public] debt is very dangerous,” he said. “It is a big mistake to think that there is [any such thing as] a controlled, calm restructuring.”

• Alessandro Barbera (La Stampa), Ulrike Sauer (Süddeutsche Zeitung), Philippe Ridet (Le Monde) and Pablo Ordaz (El País) contributed to this report