ECB’s De Guindos increases pressure on Italy over ESM: ‘We cannot wait until the next crisis’

Brussels – Italy, which has already come under pressure to ratify the European Stability Mechanism reform treaty on several occasions, receives yet another reminder. This time, it is the vice-president of the European Central Bank, Luis De Guindos, who insists. He is speaking at the conference for the 10th anniversary of the Single Resolution Mechanism (SRM) for struggling banks, where he offers an overview of what has been achieved and, more importantly, what still hasn’t.

 “The banking union remains incomplete, at a time when the EU needs to uphold its fundamental values and defend its interests,” the ECB’s number two stressed. “We cannot wait until the next crisis to move towards strengthening the EU project,” is the message to the public, which is a warning for the Meloni government and the governing majority, who continue not to ratify the treaty as envisaged by the agreement dating back to January 2021. “While the Single Resolution Fund is ready, its backstop – to be provided by the European Stability Mechanism (ESM) – is still missing,” stresses De Guindos, who then sinks the new blow to Meloni and allies: “ If we are to be prepared for bank crises, this gap must be closed by finalising the ratification of the reformed ESM Treaty.”

 https://www.eunews.it/en/2025/06/12/de-guindos-unpredictability-will-last-for-years-financial-integration-urgent/

According to political agreements made by the eurozone members, as of January 1, 2022, the ESM bailout fund was supposed to start providing money to the Single Resolution Fund, established to restructure or wind down troubled banks, without burdening citizens. This liquidity contribution (known as the ‘backstop’, or financial parachute) should be equal to 1 percent of all deposits in European banks participating in the resolution tool, amounting to a total of around 80 billion. With the ESM reform, the intergovernmental body would come to the rescue of the Member State on demand, lending money under stricter conditions. This is the political obstacle that has so far prevented the current government from keeping to the agreements made by previous governments, holding all partners hostage.

Of course, ratifying the ESM is not the only step required to complete the banking union. There is also the unresolved issue of the European Deposit Scheme (EDIS), which is still in limbo and is just as essential as the new mandate for the European Stability Mechanism. “These issues have been on the table for a long time now​,” laments De Guindos, who returns to call for the change of course, in Italy and elsewhere, that is needed to really secure Europe from a financial stability point of view.