In the ongoing match between Italy and Brussels, the issue of the ESM has returned to the fore European Stability Mechanism. There has been a push and pull between Rome and Brussels over the ratification of the Treaty for a year. Italy does not want to sign it but in this way it blocks the use of the ESM by all the other participating countries which after the elections have returned to press for our Parliament to ratify.
Italy isolated from EU leaders
From this perspective, the push and pull isolates Italy and undermines its image as a country that respects European dynamics with consequences that could reverberate on the performance of the markets. At the last Eurogroup meeting the minister Giancarlo Giorgetti he said clearly that at the moment there are no conditions for his parliamentary green light. And he also stigmatized theexclusion of Italy from decisions on top jobs of the new Commission because a founding country cannot be excluded from the discussion on appointments as if there were a certain connection between the two negotiating tables.
Mes-backstop blocked by Rome
Created during the 2011 crisis to save states in difficulty (Spain and Ireland resorted to it but not Italy, led at the time by Mario Monti), the Mechanism had fallen into oblivion. leaving assets of 708 billion to sleep paid by its shareholders. A year ago he was resurrected by sewing him a new garment which involves the creation of a support device (backstop) in case of c I laughed b ancaries and a series of other purposes that would allow the mobilization of firepower amounting to 500 billion euros. But the reform awaits Rome’s yes.
In the past, members of the government majority said that the backstop served above all to get German banks out of trouble. In general, these technical bodies endowed with great financial power, as is known, do not enjoy great sympathy in the centre-right. However, the persistent fear in government circles is that of the stigma of being a “cicada” country that could be attributed to Italy in assessments of debt sustainability.
Tensions with Brussels
Now the brutal exclusion of Rome – whose government is the only one to emerge victorious from the elections – from the negotiations on appointments has further exacerbated the positions. For now, the markets do not seem to have attributed weight to the controversy over the ESM. The spread it rose by about twenty points above all due to the uncertainty created by the French political earthquake, but the desire for revenge on the right of the Franco-German directorate which was left in pieces by the vote and the opening of an infringement procedure against Italy for excessive debt they sound like a alarm bell. Italy, with a debt approaching 3 trillion and a full-scale return of austerity in Europe, has not nothing to gain by a worsening of relations with Brussels. It would be good if this were taken into account in the secretariats of the government parties, especially the League.
What way out
The director of the Mes Pierre Gramegna it opened a window of compromise. The Mechanism is willing to evaluate a expansion of its functions which takes into account the heavy commitments in terms of defense and ecological transition as Italy would like. It could be a way out, but Gramegna first asks for ratification by the Italian Parliament, then there is discussion. (All rights reserved)
Posting time: 26/06/2024 19:00
Last update: 06/26/2024 7:00 pm
