Brussels puts the gravestone on Italy's requests to change the reform of the Mes (European Stability Mechanism). The question is clear: «The amendments to the reform of the Mes Treaty – this is Brussels' position in view of the Eurogroup on Monday 16 January – will not be negotiated. It will have to be ratified as it is. Obviously we will continue the discussion on how to develop the Mes but it is a discussion that goes on all the time and above all it will only start once the ratification has been completed".
Mes reform: Italy the last to approve it
The Mes reform has already been signed by the Conte government in 2021 and must be ratified by Parliament. Germany has also done so, after the go-ahead from its Constitutional Court a few weeks ago. Only Italy remains, last among the 19 countries of the euro area (to which Croatia has been added since 1 January). Giorgia Meloni's statements, since she arrived at Palazzo Chigi, tend to emphasize the fact that Italy will not resort to the Mes "as long as I count for something". On the other hand, however, the premier also made it clear that Italy's green light to the Mes can no longer be postponed and opened for ratification already before Christmas. The premier herself met with the new director general of the Mechanism, the Luxembourger Pierre Gramegna, appointed in December also with the support of the Italian government. What emerged after the meeting? Beyond the formal ratification, on which Parliament will express itself, the prime minister now lets it be known that she is interested in thinking about the substance: it is necessary to "verify possible corrective measures", together with the other states, to make the Mes "an instrument effectively capable of responding to the needs of different economies. This is the new version of Palazzo Chigi. On the other hand, the EU leaves no room: and Italy will not go down in history for being the only country that has screwed up an ameliorative modification of the old and infamous State-saving Fund, the one it saved (but at a very high price) the economy of Greece.
«The president of the Eurogroup - they point out in EU circles - was in Rome last Monday and had a meeting with the minister Giancarlo Giorgetti. The discussion was constructive, we are convinced that the Italian Government will start the ratification process which will conclude positively».
Mes: what the Stability Mechanism provides for
The Mes was established in 2012 with the aim of providing financial assistance to states in difficulty. Starting from 2017, discussions began in Europe on a possible revision of the founding treaty. The discussion ended on January 27, 2021 with the signature by all 19 countries of the Euro area.
The endowment of the Mes is beyond 700 billion, of which over 100 are paid by our country (at the moment, however, only 14 have been paid). The novelty of the reform consists in the fact that there is no automatic debt restructuring procedure and the checks on debt sustainability are carried out with "sufficient margins of discretion". Another important novelty is that the reformed ESM has a new function in the management of banking crises. It means that it will be able to support the Single Resolution Fund for the banks, a parachute for European banks in difficulty fed by the banks themselves, not by the states. Fully operational, i.e. from 2023, the Single Resolution Fund it should reach a capacity of 60 billion, covering 1% of deposits in the Eurozone.
Finally, healthcare. With the reform of the ESM, it is possible to apply for loans exclusively for interventions in the health field. The only condition is precisely that this money must be spent in this sector. For Italy it would be 37 billion with a very low interest rate, lower than that needed to finance the public debt.
