THEEurogroup gave the green light to the reform of the European Stability Mechanism (MES), that means the bailout fund. Between 2020 June 31 and 2022 December 19, the 2 countries of the Eurozone will be able to receive up to XNUMX% of their GDP from the Fund's coffers (for Italy about 36 billion euros), provided that these resources are used exclusively for "direct or indirect" healthcare costs (ambiguity is intentional) related to the coronavirus emergency. cup of interest is practically nil (0,1%) e the deadline to repay the loan is 10 years.
MES: GOODBYE TO "CONDITIONALITIES"
The finance ministers of the currency area have swept away any doubts about the so-called “conditionality" they are not foreseen and cannot be introduced in the future. Translated, it means that - unlike in the past - to draw on the Mes it will no longer be necessary to sign any agreement with Brussels on the consolidation of public finances. The chain linking the bailout fund and austerity policies has been broken.
STOP THE SURVEILLANCE OF THE TROIKA
Not only. The agreement reached by the Eurogroup (e celebrated by the Stock Exchange) also sterilizes the "enhanced surveillance" envisaged by the original rules of the Mes. In the future, the countries that will access the Fund they will not end up under the Troika's lensnor will they receive inspectors from the European Commission or the ECB on their territory. They will only be expected quarterly reports in order to verify that the Mes money is actually spent on health needs caused by the Covid-19 pandemic.
THE (INTENDED) AMBIGUITY OF "INDIRECT HEALTHCARE COSTS"
But what is meant by indirect health care costs? “It is up to the Member States to interpret it and for the Commission to evaluate it,” explains di Mario Centeno, president of the Eurogroup. No preventive stakes, therefore: you can work with your imagination. “The Commission will not start making strange calculations – assures the Commissioner for Economic Affairs, Paolo Gentiloni – we are aware that the pandemic has imposed immense efforts on states. The one for the fight against the virus will be an important item of public budgets: we are aware of it ".
GUALTIERI: NOW "SURE", EIB AND "RECOVERY FUND" BY SUMMER
The Minister of Economy, Roberto Gualtieri, spoke on Twitter about the next steps to be taken in the European negotiation:
THE 5 STARS DON'T FIT: "INADEQUATE TOOL"
Despite many reassurances from every possible source, the 5 Star Movement continues to be against Italy's use of the Mes. The reason is not clear: the various Grillini exponents - led by the pro tempore regent, Vito Crimi - insist on defining the State-saving Fund as an instrument "inadequate”, but they avoid going into the merits. No one has yet explained in detail why our country should give up 36 billion of investments in health care, given that the conditions are now favourable.
SPLIT MAJORITY: PD AND ITALY VIVA FAVORABLE
The majority therefore remains split, because Pd and Italia Viva consider the reform of the Mes positive and would like to use it.
This is the comment on Twitter by Antonio Misiani (Pd), Deputy Minister of Economy:
Luigi Marattin, deputy parent company of Italia Viva in the Chamber, underlines instead that “the Mes special credit line will have only one rigorous conditionality: the same one decided exactly a month ago, to use that money only for direct and indirect expenses related to the health crisis. We can borrow up to 35,74 billion, for a maximum duration of ten years and at a rate of around -0,1%. It means saving about 700 million every year in terms of lower interest, 7 billion in all. If we don't use this possibility, we would want to ask for this money from those who continue to oppose it for ideological reasons or meaningless slogans".
COUNT DOESN'T GET UNBALANCED
Which side is Giuseppe Conte on? What the Prime Minister thinks about the opportunity to use the Mes is not clear. The Premier limited himself to saying that "the three measures (Sure, Bei and Mes) are insufficient" and therefore a "significantly sized" Recovery Fund will be needed.
[Laws the Eurogroup press release]
