Italian opposition calls eurozone bailout fund ratification postponement ‘embarrassing’

Italian opposition parties are up in arms and have called the coalition government’s decision to postpone the much-awaited ratification of the European Stability Mechanism (ESM), the Eurozone’s bailout fund, embarrassing.

Azione and Italia Viva – two Italian parties affiliated with liberal Renew Europe in Brussels – called on the government to ratify ESM, an intergovernmental organisation established by Eurozone member states in 2012 aiming to throw a lifeline to countries facing financial distress while being cut off from markets.

In return, these countries should carry out deep reforms to ensure the economy’s long-term stability.

For ESM to take effect, it needs to be ratified by all Eurozone members. Italy is the only member which has not so far ratified the mechanism.

Read more: Reluctant Italy postpones eurozone bailout fund’s ratification

But the conservative government remains reluctant, and the issue has created internal debates even within the governing coalition formed by Fratelli d’Italia (ECR), Lega (ID) and Forza Italia (EPP).

Speaking at the Chamber of Deputies and the Senate, Prime Minister Giorgia Meloni said it’s not the right time to do so.

“I do not think it is useful for Italy to fuel an internal polemic on certain financial instruments, such as the ESM, at this stage […] Even before a question of merit, there is a question of how to defend Italy’s national interest”, the Meloni said.

“Italy’s interest today is to approach the negotiation on the new European governance with a package approach, in which the rules of the Stability Pact, the completion of the banking union and the financial safeguard mechanisms are discussed as a whole while respecting our national interest”, she explained.

The Italia Viva and Azione group presented a resolution in the Chamber of Deputies on Wednesday asking the government to commit to ratifying the ESM. The Democratic Party (S&D) is also in favour of ratification.

“By not ratifying the ESM we are not losing funds, we are losing our face […] Meloni will end up ratifying it”, said Azione-Italia Viva group leader, Senator Matteo Richetti.

“An instrument that no country is obliged to use but would become operational and available to those who would like to request its activation […] in particular to tackle systemic banking crises and increase the degree of mutualisation of risks within the Union”, reads the resolution presented by the liberal parties.

For its part, the Democratic Party (PD/S&D) secretary Elly Schlein accused Meloni of “embarrassing” Italy also with respect to international interlocutors.

“To keep twenty countries blocked for ideological reasons and not, to tell Italians the truth- namely that ratifying the ESM does not mean asking for activation – is to be an irresponsible government”, Schlein said.

(Federica Pascale | EURACTIV.it)