The definitive yes to the ratification of the European treaties on the Fiscal Compact and the European Stability Mechanism has arrived from the Chamber, after the green light arrived last Friday from the Senate.
Among the main points of the fiscal compact the commitment to have a structural deficit that does not exceed 0,5% of GDP and, for countries whose debt is less than 60% of GDP, 1% stands out in particular. There is also an obligation for countries with a public debt exceeding 60% of GDP to return within this threshold within 20 years, at a rate equal to one twentieth of the excess in each year.
Each state will then have to ensure automatic corrections with specified deadlines when it is otherwise unable to achieve the agreed budgetary targets. Finally, the public deficit must always remain below 3% of GDP, otherwise semi-automatic sanctions will be triggered.
As for Esm, it is the mechanism that intervenes as a hedge against the refinancing risks of the States and to protect against the uncontrolled increase in the yields of public bonds. It must replace the EFSF (European Financial Stability Facility) but will not be operational before 12 September, when the German Constitutional Court will have to establish its legitimacy.
Italy fought at the European Council at the end of June to obtain the go-ahead for a mechanism to stabilize spreads through the purchase of government bonds by the EFSF and the ESM.
Once the political agreement has been reached, the economic ministers of the Eurozone and the European Commission are now negotiating the details on how to activate and operate the calm spread mechanism.
The ESM will have a capital of 700 billion euros, of which 80 paid up and 620 "on call". Italy, with 17,9% of the capital, will be the third shareholder after Germany and France and will have to honor a commitment of 14,33 billion euros to be paid by 2014.
The foreseen installments are 5,73 billion in 2012 and 2013 and 2,87 billion in 2014. The "on-call" part due to Italy is 111,07 billion euro. Money that does not have to be paid, but that each country undertakes to give quickly and unconditionally if requested by the ESM.
