Italian newspaper Il Giornale, owned by former Prime Minister Silvio Berlusconi, has caused controversy by printing a front page headline which said “Fourth Reich” above a picture of German chancellor Angela Merkel.

The picture in Il Giornale also showed Chancellor Angela Merkel raising her right arm in salute, a gesture associated with the Nazi salute used by Hitler’s followers.

The article, which was published on Friday, has heightened a bitter war of words between Italy and Germany over the handling of the ongoing Euro crisis.

The angry article attacked tough talking Chancellor Angela Merkel saying that her intransigence had brought “us and Europe to its knees” adding that “Italy is no longer in Europe but in the Fourth Reich.”

It went on to say: “In the First Reich, Germany also wanted the title Emperor of Rome and in the next two they used their own means again against the states of Europe, two world wars and millions of dead, obviously this was not enough to quieten German egomania.

“Once again it has surfaced but this time not with the use of cannon, this time it’s the Euro.

“The Germans believe it’s theirs and we have to submit, surrender, hand ourselves over to the new Kaiser Angela Merkel who wants to rule in our own house.”

Il Giornale, owned by former Prime Minister Silvio Berlusconi, has caused controversy by printing a front page headline which said “Fourth Reich” above a picture of German chancellor Angela Merkel

It is not the first time that Il Giornale has been at the centre of controversy with Germany – two months ago after Italy beat Germany in the Euro 2012 semi final they printed a picture of Chancellor Angela Merkel below the headline: “Ciao, ciao culona” which translates as “Bye bye lard arse.”

Last year it was alleged that Silvio Berlusconi, who stepped down as prime minister last November, had been taped calling the German leader “culona” although he has insisted they had a good working relationship and are still in touch – claims which have been denied in Berlin.

Germany has been at loggerheads with Italy over the handling of the ongoing Eurozone crisis and accusing Rome of not doing enough to get its finances in order to resolve the single currency problem which has been dragging on for two years.

Newspapers in Germany have repeatedly attacked the southern European economies of Greece, Spain and Italy for their poor performances and bail outs offered to them.

Il Giornale has repeatedly accused current Italian technocrat prime minister Mario Monti, of not doing enough to stand up to Germany, comparing him to Neville Chamberlain who famously declared in 1938 he had “secured peace in our time” after holding talks with Nazi dictator Adolf Hitler only for war to break out the following year.

In an interview with Germany weekly news magazine Der Spiegel, Mario Monti called on Chancellor Angela Merkel to show greater flexibility on how the European Union tackles the eurozone crisis and suggested there could be a backlash if this does not occur.

Chancellor Angela Merkel has repeatedly argued that the only way to restore confidence in the under-fire single currency in the long term is for eurozone countries to show budget discipline and concede sovereignty to achieve greater fiscal integration.

But Mario Monti said that “more flexibility” had to be given to eurozone countries who are trying to put their economic houses in order for Italy’s current policy of rigor and tough economic reforms to “have a future”.

He added that he had told Chancellor Angela Merkel he was very worried about “the growing resentment in the Italian parliament against Europe, against the euro and against the Germans”.

Mario Monti also added that leaders should not let themselves be tied down by the domestic agendas of their national parliaments in EU negotiations and said: “If governments let themselves be bound completely by the decisions of their parliaments without maintaining their own scope for negotiation, Europe is more likely to break up than it is to see closer integration.”

But within hours of the interview Chancellor Angela Merkel and German MPs hit back at Mario Monti.

Georg Streiter, a spokesman for the German leader, said: “The chancellor’s opinion is that we in Germany have always done well with the right balance between parliamentary support and the participation of parliament.”

While Foreign Minister Guido Westerwelle, said: “Parliamentary checks on European policy are beyond any debate. We need to strengthen, not weaken, democratic legitimization in Europe.”

Mario Monti is due to meet Chancellor Angela Merkel later this month in Berlin to again discuss the Eurozone crisis and today markets were positive as the spread between German and Italian bonds dropped.