Brussels – Goodbye ESM. Italy rejected and buried the proposed reform of the European Stability Mechanism. The Chamber of Deputies did not ratify and actually opposed the text aiming to transform the inter-governmental organization. The vote on Article 1 calling for ratification took little time in the parliamentary branch: 72 votes in favor to 184, and 44 abstentions. These numbers mean that ESM is out. All national parliaments had to approve the reform treaty for the new rules to come into force. Only Italy was still missing, and still is. The Italian vote made the entire process uncomplete, meaning that it has to start over.
The League welcomed the otcome: “Parliament is sovereign and today rejected the ESM, an instrument linked to another era that would have brought no benefit to the country, but only conditionality, blackmail, and surrender of sovereignty to Brussels,” said Antonio Maria Rinaldi, member of the Committee on Economic and Monetary Affairs of the European Parliament. Many rejoice in the League party, starting with the secretary, Matteo Salvini, who spoke of “victory.”
✅ VICTORY: THANKS TO THE LEAGUE, ITALY STOPS THE ESM.
Parliament rejects the ESM: Italian pensioners and workers will not risk paying for the bailout of foreign banks. And it doesn’t matter if Leftist parties get angry.
A League battle fought for years and… pic.twitter.com/LYeO20mEvv– Matteo Salvini (@matteosalvinimi) December 21, 2023
Whether it is a victory, however, is all to be proven. Politically speaking, the majority parties, which decided to bury the ESM, can certainly gain domestic support thanks to such a move. After all, the president of the Council, Giorgia Meloni, had publicly stated that she would never endorse the ESM reform proposals. The government currently in office in Italy have been giving proof not to like such a reform proposal. By making it undeliveralbe, Meloni and pals prevented all partners from moving forward with something considered fundamental in the process of completing the banking union.
As of January 1, 2022, according to the intentions of the agreement backed also y Italy, it was supposed to provide a Single resolution fund to restructure or liquidate troubled banks. Economy Minister Giancarlo Giorgetti (League) had gone to great lengths to find a solution. He tried to convince and reassure the economy and finance ministers of other countries. Now, his credibility is at stake. And not only Giorgetti’s. It is something touching all government members, starting with Antonio Tajani, a well-known and respected figure in Brussels. His reputation is also in danger of being reconsidered.
Italy took responsibility for blowing a path of transformation of the Union with the logic of ‘why put my money to help other people’s banks?’. The same kind of logic sooner or later will be used againt Italy be certain countries, especially by who is traditionally disinclined to any concession. That is the frugal countries and other sovereignists, friends only in theory of those who, like the League, make ‘me first’ their figure of speech. Not even too veiled of a reference to Geert Vilders, triumphant in the last elections in the Netherlands with his PVV. Euroskeptic, anti-immigration, a friend of Salvini (the PVV is part of the Identity and Democracy party, the same as the League, and has no MEPs because, in the 2019 elections, it did not reach the threshold) but capable of making the rounds of the web and newsstands all over Europe with that sign that reads “geen cent naar Italie” (not a penny to Italy).
The government, whatever it had in mind, has shown all the worst of itself. Giorgetti can always say that Parliament is sovereign, but, as a matter of fact, he has been defeated by his own party. The government shows that it has no control over Parliament, which is healthy in a democracy, of course, but where still the majority is an expression of the government team. If there is no fault there is malice, or vice versa.
Too bad, Europe works differently. It is true, that they did not want the reform of the European Stability Mechanism, as League and Brothers of Italy claim. Although to be fair, the ESM reform was agreed upon by heads of state and government at the end of the December 2018 Eurosummit, during the first Conte government comprising the League and the 5 Star Movement. Who did Giuseppe Conte speak for, then? the first all-Italian short circuit. Today, however, the 5-Star Movement, of which Giuseppe Conte is the leader, voted against. How can we trust those who first promise one thing and then, when it comes to doing what they say they will do, back out? Second short circuit, affecting not only the credibility and reliability of those involved, but also of another Italian party-political spectrum.
But Europe, they said, works differently. Every commitment never regards now. Major reforms and long-term agendas necessarily involve future governments, even if they are different from those signing the commitments. Saying ‘I did not sign this agreement’ does not help to build a common path. If anything, it helps undoing it. The patriotic government probably does not realize how much this could cost, politically. All the more reason, now that the bailout cushions are not there, the rules on public accounts so they don’t trigger the spiral of sovereign debt, which in Italy is high — very high — will be current without discounts and with a bureaucratic approach. In Brussels, they prefer to avoid comments on the vote in Montecitorio. But it is not a benign silence. On the contrary.
Nothing is lost yet. A new ESM ratification text may return to the House, but not for six months. That is, after the European elections (June 6-9, 2024). The ruling coalition takes its time and makes others waste it, maybe also in an electoral logic. Little harm. In Italy, after all, this is how they see it. The question is how others see it and to what extent the partners will be able to overcome this.
“It remains deplorable that we have not been able to achieve the backstop (the financial parachute, ed.), an important milestone toward the completion of the banking union in the EU,” said Eurogroup President Paschal Donohoe. “While fully respecting parliamentary deliberations, I regret the outcome.” Then, the lunge on reliability and credibility: “Italy remains the only country blocking the finalization of a reform to which we all committed in 2021.” Everyone, including Italy. Which will not easily get rid of its partners. “I will continue my engagement in this regard with the Italian authorities in the coming months,” Donohoe concludes.
