"We are at a crossroads. It's not enough to have a common currency, a president or a common source of financing," Prime Minister Renzi said at a speech to parliament outlining his priorities for Italy's EU presidency, which begins on July 1st.
"If Europe does not change course there will be no growth…and there can be no stability possible if there is no growth," he said, adding that Italy's presidency "must be the moment for reform."
The dynamic 39-year-old, who came to power after ousting his predecessor in February for failing to boost growth, said the euro had "been given the task of building Europe … but the single currency is not enough."
Renzi, who is pushing for a softening in the German-inspired austerity policies that Brussels has pushed in recent years, said Italy was not asking for a relaxation of EU budget rules "but there are different ways of approaching rules."
His comments came amid a fresh debate over an easing of EU fiscal rules, with German Finance Minister Wolfgang Schaeuble warning that running up new debt would be "the worst possible" thing to do.
Defenders of the stricter rules, mostly the EU's richer countries to the north, are wary of reversing course, and suspect the calls to change them are thinly-veiled efforts to make room for renewed public over-spending.
Data released on Monday showed that Eurozone business activity slipped for the second month running in June, suggesting a modest recovery could be stalling.
Renzi said the bloc must now answer the question "what is Europe today?"
"Today Europe is boredom … it is submerged by numbers and without soul," he said.
"Either we accept that we share common values, or you can keep your currency and we'll keep our values," he said, giving immigration and the rescue of boat refugees washing up on Italy from Africa as an example of a key issue for the upcoming presidency."