In a blitz before the Christmas close, the League and the Italian Brothers, with foreign assistance from Giuseppe Conte’s 5-Star Movement, voted against ratifying the ESM, effectively preventing the other 19 member states of the European Union from receiving it. Taking advantage of the Fund’s new rules, which aim to provide aid to Eurozone countries in financial distress.
Consequences of ‘no’ to ESM
As economist Tito Boeri explained in La Stampa today, the choice not to ratify the European Stability Mechanism is “incomprehensible and reckless”. These words of the former INPS president can be shared mainly for two reasons: First of all, what was voted in the Montecitorio assembly was not access to the Fund, but precisely the approval of the new rules; Rules that are much more suitable for a country like Italy, which has a huge public debt compared to other states, than the current rules that remain unchanged due to yesterday’s rejection.
Simply put, if Italian banks go through moments of crisis, access to the Fund will be less advantageous. Another secondary problem relates to financial markets: the “combination” between the refusal to ratify the ESM and the Franco-German agreement on the new rules of the stability pact – which in effect led to minister Giorgetti being forced to ratify elections held elsewhere – left Italy with significant They position themselves on the edge of Europe.
All things considered, of the two problems it is precisely the second that harms Italy, because – as the economic director of the Democratic Party, Antonio Misiani, explained in these pages yesterday – the next economic maneuvers will not allow debt and will probably not allow borrowing. It includes cuts and, above all, new taxes. It is a major step back that will make the country less attractive to investors compared to the Draghi era and will harm the economy in the medium and long term.
a political choice
So why this choice? The ESM, in all its forms, is nothing more than an electoral flag that populist parties use to mark the terrain of their voters’ increasingly anti-European sentiment. Even if there had been a vote to buy a new tent for the intergovernmental organization’s offices in Luxembourg, Matteo Salvini’s League, Giuseppe Conte’s 5 Star Movement and Prime Minister Giorgia Meloni’s party would probably reject the proposal.
Three letters whose meanings few people know give rise to fake news and outlandish interpretations, as do all questions that require minimal detailed reasoning. For years, the specter of Greece has been raised by making people believe that the ESM means Italy’s indebtedness and “loss of sovereignty” in the face of a terrible Europe. In reality, if we talk about “loss of sovereignty”, the agreement that the government has accepted on the new stability pact, bowing its head to Ecofin, is certainly more problematic than the much-feared ESM: the cornerstone behind the term “sustainability assessment” is “sustainability assessment”. Implementation of the new regulations (not surprisingly not so strongly supported by Germany) is a sort of de facto commissionership of the economic ministries of the member states.
It is said that the ESM will make Italian citizens pay the price of the German banking crisis. Here too the interpretation is absolutely misleading. This would be like saying that German taxpayers paid for an economic observatory at Castelpizzuto in the province of Isernia, financed by Pnrr funds. This is certainly true to a point, but if we object to every community fund in this way, everything becomes questionable. It is no coincidence that German far-right parties, which oppose the ESM with arguments similar to those of our sovereignists, claim that the Fund will burden German taxpayers with a possible crisis of Italian banks.
Race for European elections
We will probably return to talking about the ESM after the Christmas break, for two main reasons. The first is that the main parties, which base part of their propaganda on the war over the Fund, are currently busy defending the nativity scene and Italian Christmas traditions. Second, Italy’s veto of the ESM will be a small gift they can offer their voters ahead of the next European elections; Let’s remember, it is a race that pits “all against all” and creates competition across the political spectrum, thanks to the proportional election law.
Matteo Salvini and Giorgia Meloni will have to make us forget two absolutely unforgettable fiscal maneuvers: excise taxes on fuels of excellent health and, above all, the exponential increase in immigrant inflows. In fact, the negative consequences of what has been written before will not emerge until the next budget law, which will be written months after the European Parliament’s renewal vote. This will allow the two parties to claim “victory” against the “Europe of bankers and bureaucrats”. Considering the level of knowledge of the majority of voters on economic issues, the strategy may prove successful. The attraction is the silent abstentionism of Forza Italia, the only majority force that did not vote against the Fund.
ESM and opposition
Of course, the rival camp is included in the 2024 European Championship match. The “Melonian” intervention of the leader of the 5 Star Movement in the Montecitorio assembly effectively begins the dance of struggle between the main parties of the existing minority.
Even the 5 Star Movement, which has always been against the ESM, will be able to demand a bit of healthy anti-European consistency from its voters, and that will never hurt. The former prime minister’s dream is to beat Elly Schlein’s Democratic Party, perhaps in a photo finish. Distance is not about the stars at the moment, and an aggressive and covert “pro-sovereignty” election campaign could push the party founded by Beppe Grillo and Gianroberto Casaleggio closer to the 20 percent psychological threshold.
The Democratic Party, for its part, will try to carry the flag of Europeanism as much as possible; This remains a reassuring factor for more cultured voters, who tend to choose parties that guarantee stability across the political spectrum and do not promise masochistic conflicts. with the chancellery of other countries. In this case, too, the pool we will try to draw from is the votes of Forza Italia: in this race for moderate voters, the Nazarene party, which has positioned itself decidedly further to the left with the election of Schlein, can collect these votes. less so than the “small” Action, Italia Viva and Più Europa, who would probably present themselves as the real champions of Europeanism and above all as the only “obstacle” to the spread of the sovereigntists. The challenge for them is the critical threshold of 4 percent, which is the basis of existence.
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Source: Today IT

Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.