"On the European Stability Mechanism additional reflection is needed", said the political leader of the M5S, Luigi Di Maio, according to what the newspaper writes today La Repubblica. The message is clearly addressed to the Prime Minister, Giuseppe Conte, and helps to raise tension in the majority.
As foreign minister, Di Maio will have to sign the reform of the Mes. It seems very difficult for Italy to take responsibility for blowing everything up: the most likely prospect is that at the December European Council – where unanimity will be required – our country should ask for a postponement. Also because, in the event of a European green light as early as next month, the law on the new Mes would arrive in Parliament in January, and at that point the stability of the executive would be at risk. Meanwhile, in the Chamber and in the Senate, the League is ready to present a resolution to prevent the signing of the Italian government and risks gaining support also in the Movement.
In recent days Conte has vigorously defended the government from attacks by the leader of the Carroccio, Matteo Salvini. The Premier speaks of a "collective delirium" aroused by the leader of the opposition: the same one that "a few months ago he participated in the tables where the Mechanism was discussed. Now the same person and the same party have discovered the existence of the Mes and are shouting scandal: an irresponsible attitude".
Salvini responds by accusing the Premier of "betrayal” for giving the political green light to a mechanism that would penalize the states with the highest debt. “Mr. Conte is a liar or forgetful – says the Northern League secretary – if he were honest he would say that at those tables as well as at every public debate we have always said no to the Mechanism ”.
Palazzo Chigi defends itself by emphasizing that no changes to the Mes have yet been approved and that they will be discussed at the European summit in December. In view of the appointment, Conte will speak in the Senate three days before. But a majority summit is already scheduled for tomorrow, Friday, which at this point could turn into a crossroads. The Minister of Economy will also be present, Roberto Gualtieri, ready to explain that the new Mes does not envisage - in order to access the fund - the obligation to restructure the debt. A concept that the tenant of via XX Settembre is ready to reiterate in the Senate Finance Committee next Wednesday.
Meanwhile, also sources of Bankitalia they announced that the reform "does not foresee or announce a restructuring of sovereign debts" e that there is no “trade-off between financial assistance and debt restructuring”. The Bank of Italy is not "unfavorable" to the reform, but in recent days it simply wanted to warn of the "risks on any future initiatives on the operations of the Mes".
On the other hand, the new rules are rather ambiguous: in the event of a request for help from a state with a high debt, the ESM can (not "should") ask for a debt restructuring, i.e. a cut in interest or a lengthening of maturities on government bonds, which would entail a deadweight loss for private investors.
Such an operation would be really dangerous for the Italian banks, which have 400 billion of public bonds in their bellies. The president of Abi Patuelli had reacted strongly to the news on the Mes: "If our sovereign debt is not protected we will no longer buy it". But then the Banking Association said it was reassured by Gualtieri's clarifications.
