ESM, Europe put pressure on Italy again. “Giorgetti has to clarify”

Brussels – The “truce” is over. The four-month suspension of parliamentary work on the European Stability Mechanism (ESM) declared at the beginning of July has expired, and now the Italian minister of Economy, Giancarlo Giorgetti, has to clarify about the intentions of the Italian  government on the ratification of the treaty. The treaty opens the door to the reform of the inter-governmental organization, providing new tools to rescue banks with liquidity problems. “It is appropriate for Giorgetti to clarify the government’s intentions and the timetable for ratification”, EU senior officials said. The ordinary Eurogroup meeting, the last one of the year, puts additional pressure on Italy and its ruling coalition.

“We did not ask Giorgetti to brief us at every meeting”, the same soruces pointed out. “The four-month period of political pause has come to an end, and everyone wants to know what happens next,” they added. This is a way to reiterate that partner’s patience doesn’t last for ever. Eurozone Member States try to minimize, as a clash would help no one especially at a time when economic growth is projected to the downward. Offering scenes of struggles among Member States would not lead neither markets nor investors to bet on the Eurozone.

Nevertheless it is true that without the ratification by all 20 Eurozona Member States the single resolution fund for banks will not have neither the backstop nor the full power to act. So far, Italy is the only Eurozone to ratify the ESM reform treaty. According to the agreement signed in late January 2021, the bailout fund was supposed to start providing money to the Single Resolution Fund as of January 1, 2022. The Fund was set up to restructure or liquidate banks in troubles. “We may be in a better situation, but life goes on”, reasoned loudly EU officiales on the eve of the meeting.

The latter is not a new message at all. This is not the first time that Europe put pressure on Italy on the ESM, and in several, different, occasions rerequests for clarification on the file have been submitted to the Italia authorities and decision makes. What makes the other EU member States worried is the stance within the current government. On the one hand Giorgetti’s reassurances, on the other hand Prime Minister Giorgia Meloni produced a series of statements in open contraddiction with Giorgetti’s. That happened in the framework of domestic affair, as well as in front of EU leaders. Now the situation is the following: the parliamentary pause is over, while the standstill goes on. That’s why everyone is now waiting for Giorgetti.