‘Italy signs Mes reform’: EU corners Meloni government

Put them in the corner. On the occasion of the next Eurogroup on Monday, President Paschal Donohoe will deliver a “message” to Economy Minister Gianfranco Giorgetti that the reform of the European Stability Mechanism must be approved by Italy, according to a senior European Union official. In other words, Italy no longer has time to delay this decision as the only obstacle to its implementation.

The Mes reform, which started in 2018 and was reaffirmed in 2021, has always been delayed on the Brussels agenda due to the lack of signatures from two member states, Italy and Germany. Since December, the German Constitutional Court has found the objection to the reform presented by Berlin unacceptable, leaving our country as the only and last competitor. Now, despite her well-known opposition to the bailout fund, Meloni is forced to involve herself in the government’s discussion plans.

what is mes

The European Stability Mechanism is an intergovernmental organization within the European Union. It consists of the governments of all member states and has a council of 19 economy ministers. In particular, it has a duty to help countries in economic difficulties. In essence, the mechanism allows lending money to the requesting state through common funds collected by each member in proportion to its contribution to the economic growth of the entire Union. Currently, the first country to contribute to the joint fund is Germany with a contribution margin of 27%. We are in third place with 17%. There are 80 billion in total.

The reform of Mes, which has been discussed since 2018, returned to the political public debate when it was considered as a solution to deal with the post-epidemic crisis in our country between the end of March and April 2020. Already at the time, politics was divided on the issue, leading the then opposition supporters to launch a tough fight against the implementation of the bailout fund. At the time, Meloni and Salvini fiercely criticized the implementation of the plan, which led former prime minister Giuseppe Conte to launch a fierce attack against the two bases on live TV. The European Union has calmed the waters itself by putting the mechanism aside as a solution given the deteriorating situation across the continent and implementing the Recovery Plan.

tips of reform

The reform conceived by Brussels is essentially divided into 3 points and is a great compromise between the two main counterparts of European countries: those who do not fall within the Maastricht growth parameters (in fact, the most indebted, including Italy) and those who fall (thrifty countries, the richest in northern Europe).

First of all, we are talking about the so-called “Holdback”: this is a new boost to the “One solution fund” financed by all European banks, which will make them more stable and safe from bankruptcy. 55 billion euro Second, credit lines will be adjusted for access to loans to avoid small crisis spikes. And finally, new tools will be introduced to improve the quality of individual government debt. The latter could also be of great help to our country, as Italy’s debt is still a problem today for many representatives of European financial institutions, including the head of the European Central Bank, Christine Lagarde. In recent days, the same made a statement on exactly this, hoping that “Italy will quickly approve the reform, as it is an integral part of the completion of the banking union”.

As a matter of fact, Italian public debt continues to be a problem for the European Union, as it is well above the Eurozone average.

government pirouette

This latest message to our Treasury Secretary is part of the long string of requests the EU has made since the last government. The Draghi government gave the green light to the matter by mutual agreement, but the discussions in the parliament did not start. The institutional crisis of last July 20, the ensuing snap elections and the inauguration of Meloni delayed the parliamentary decision. And although Giorgetti had repeatedly declared that the line on the issue would be the same as the previous government, Meloni immediately continued to declare his opposition. The last one is in Porta a Porta in mid-December.

“But we wonder why Mes is not being used by anyone. Because the terms are so strict and Mes is a preferred creditor, that is, the first person to be paid in a difficult situation. So we wonder if there is a way for Mes to be a useful fund? And I want to understand that you don’t run the risk of putting a noose on it.”

– Prime Minister Giorgia Meloni.

Meloni has proven to be consistent with her own thinking, always opposing the mechanism since it was introduced in 2012. However, he is mistaken in saying that the mechanism was never used: in reality, it was used five times, if not by Italy.

In the last three months, however, the prime minister began to change his stance against reform and gave his first “yes” in mid-January after meeting with the Fund’s head, Pierre Gramegna. The government’s new pirouette can only be explained by the recognition that Italy has no other choice. When Germany was out of the game, the prime minister had to admit himself. But it’s not just him. Contrary to his own words, Meloni recently announced that he “does not want to hinder other countries” while approving the process. This latest turnaround is part of a series of decisions that have revealed the little room for maneuver the government has in Europe in the face of a path of government that was heavily outlined by the previous government. With a Pnrr to build, a government crisis recently left behind, the maneuver approved in extremism, and the recent events in Cutro, there is little prospect of negotiation with the Union, especially to move forward alone.

monday advice

Cornered by the entire Union, Giorgia Meloni’s style is humiliated to the demands of Brussels, which could be a covert compromise. On Monday, Giogetti will continue to remind us of our country’s commitment to signing reform. But there is an entire parliament that needs to be persuaded. And as leaders like Matteo Salvini continue to fight against it, the decision of the bicameral may come quite late.

Source: Today IT