Chancellor says Ciao Italia

The escalating diplomatic spat between Italy and Germany deepened on Wednesday when German Chancellor Schröder’s office announced the chancellor had dropped plans of taking a holiday in Rimini in the province of Emilia Romagna in Italy and would spend his vacation in his home town of Hanover instead.

"Chancellor Gerhard Schröder does not want to put his family through further speculation about the little vacation time they have together," government spokesman Bela Anda said in a statement.

Senior German ministers outraged

Senior ministers in Schröder’s government also expressed their anger at Italian Tourism Minister and member of the far-right Northern League Stefano Stefani’s derogatory comments about German tourists in a letter to a newspaper and have urged Stefani to step down.

"If I were the Italian head of government, that man would no longer be in office," Interior Minister Otto Schily said in a television interview. Economy and Labor Minister Wolfgang Clement also the mass-selling tabloid Bild that Stefani "should be taken out of circulation."

Anger is mounting in Germany over a double set of insults that Italy has hurled at it in recent days.

First it was Italian Prime Minister Silvio Berlusconi and current head of the rotating EU presidency, who compared a German member of the EU parliament to a Nazi concentration camp guard during his debut speech to the European parliament last week. Then on Friday, Stefani in an open letter described Germany as a "country intoxicated with arrogant certainties."

"We know the Germans well -- these stereotyped hyper-nationalistic blondes, who have been indoctrinated... to feel top of the class whatever the situation. They noisily invade our beaches," the minister wrote.

Though senior Italian ministers including Foreign Minister Franco Frattini have distanced themselves from Mr Stefani’s comments, neither Berlusconi nor Stefani have offered apologies for their remarks, instead opting to express regret or clarification.

Schily: "Not good publicity for Italy"

Italian officials are now alarmed that the souring of diplomatic ties between the two countries might affect tourism, with Germans accounting for 40 percent of all foreign tourists to Italy.

Interior Minister Schily acknowledged that German tourists made for an important economic factor in Italy and there was "worldwide competition for German tourists." He however pointed out that "those who kick you in the shins and spit at you must not be surprised that that is not good publicity for their country."