Italy wants mentality change, not looser EU budget rules - PM Renzi

ROME (Reuters) - Italy wants a change in European "mentality" and not looser budget rules, Prime Minister Matteo Renzi said on Friday, adding that he would propose an ambitious agenda for when Rome assumes the rotating European Union presidency next month.

"We are not asking for a revision or relaxation of the accords" on budget matters, Renzi said in a statement. "Instead we want a change in mentality, a leap forward for the entire EU as a reply to the anxiety and the challenges that Europe is facing."

Italy has called for flexibility in European budget rules to encourage economic growth and jobs, in a switch away from the austerity imposed after the euro zone debt crisis, a position that gathered momentum at a meeting of EU finance ministers in Luxembourg on Friday.

The 39-year-old Renzi took office in February after pushing aside a party rival, promising a broad series of reforms including several aimed at turning around Italy's perennially sluggish economy, the euro zone's third-biggest, which is also saddled with a 2-trillion-euro debt.

Renzi has so far held out on expressing support for former Luxembourg Prime Minister Jean-Claude Juncker, who is backed by Germany and opposed by Britain to become the next European Commission president, as he pushes for a broad agreement on more budget flexibility.

"There's no need to change the rules. On the contrary, we ask that all of them be respected. But Europe's future must be political or there will be no future. We will propose an ambitious agenda" for the EU in the second half of the year, Renzi said.

Euro zone finance ministers agreed on Thursday that EU budget rules should not be changed again after major revisions in 2005, 2011 and 2013, but that governments should fully use the leeway already built into the Stability and Growth Pact.

(Reporting by Giselda Vagnoni and Steve Scherer; Writing by Steve Scherer; Editing by Robin Pomeroy)