In anticipation of the ECB meeting on 6 September, political tourism continues among the leaders of the main European countries, who reassure each other about the conditions of their economies. After the understanding found between Germany and France, Italian Prime Minister Mario Monti is in Berlin today to further reassure German Chancellor Angela Merkel on Italy's situation. “The focus of the discussion will be first of all, the situation in the Eurozone and economic growth in Europe”a German government spokesman said. Monti could ask for more details on the intentions shown yesterday by the German and French finance ministers (Wolgang Schaeuble and Pierre Moscovici) to launch a banking union, greater coordination of economic and fiscal policies and direct the Eurozone towards the creation of a union politics.
But Monti is above all looking for reassurance. The objective of the Prime Minister is in fact to clarify the conditions that will be placed in the memorandum of understanding, the declaration of intent that each country will have to sign in order to access the resources of the new European Stability Mechanism (ESM), in the highly probable hypothesis that after Spain it will be Italy's turn to ask for aid from the bailout fund.
If on 12 September the German Constitutional Court believes that the new bailout fund is compatible with national law, the ESM will have overcome its last obstacle. The novelty of the Stability Mechanism lies precisely in the memorandum. To date, a state wishing to purchase medium and long-term securities from the bailout fund must meet pre-established conditions, while to ask for help from the ESM, it will also be necessary to sign a Memorandum to be approved by all Eurozone countries. And Monti really fears that the most intransigent such as Austria, Holland or Finland could ask Italy for heavier conditions than the reforms already implemented.
Monti will meet Merkel around 11; a press conference will follow. After lunch with the Chancellor, the Italian premier will also meet the president of the German Parliament Norbert Lammert to clarify the controversy arose a few weeks ago on the need for greater autonomy of governments from parliaments.
The prime minister's agenda will continue on 4 September when he will host French president Hollande in Rome. Then, judgment day: the ECB meeting on 6 September. And from Frankfurt, if the aid game is unblocked, important news could arrive for Italy: the famous extraordinary measures which President Mario Draghi had mentioned. In fact, the board will have to evaluate the volume and maturity of the purchases of short-term securities that it intends to make on the markets. Monti will also have to convince Merkel of the importance of this move.
