Brussels, 23/02/2016 (Agence Europe) - Italy is in favour of increased economic integration in Europe, which can be achieved by completing banking union, deepening the single market and creating a European unemployment insurance scheme.
In order to stimulate fragile growth and tackle the feeling of indifference towards the European project, the countries of the European Parliament need to speed up their integration and structural reforms, according to a document published by the Italian Ministry of the Economy and Finance on Monday 20 February.
The Italian authorities believe that a responsible use of public finances, the continuation of structural reforms and stimulating investment will feed into each other. “More symmetry is needed in macroeconomic adjustment”, they argue, stating that increasing investment and consumption in the countries with considerable current-account surpluses on the one hand and structural reforms in less competitive countries on the other are both equally important to create convergence within the eurozone. They also call for a financing and investment union for the more effective channelling of available capital into investment.
To help the countries of the eurozone to ride out economic shocks, Italy suggests setting up a mechanism to fight unemployment of cyclical origin and its consequences. A dedicated fund would serve to stabilise the employment market in question. This unemployment insurance regime would not require treaty change and would be a new symbol of the “ irreversibility of the euro”, according to the Italian Ministry. It would be financed either by earmarking part of the national resources allocated to unemployment benefits or with a fresh common fiscal capacity. However, receiving financial support, which would not be managed directly by the member states, would have to be conditional in order to avoid “unidirectional (budgetary) transfers from some countries to others while increasing risk sharing”, the Italian authorities argue.
In the financial field, the Italian authorities believe that sharing and reducing risks go hand in hand. The completion of banking union in the eurozone, through the creation of a European deposit insurance scheme (EDIS), is liable to improve financial stability (see EUROPE 11448). However, Italy, whose banking system is under pressure from the markets, acknowledges the need to act at European level in order to “reduce - over the appropriate time horizon - high levels of private debt, tackle non-performing loans and improve the overall effectiveness of the insolvency frameworks”. The document goes on to call for the creation of a backstop for the Single Resolution Fund, the current financial arm of banking union.
Migration challenge. As the EU is facing an unprecedented systemic challenge due to the mass influx of migrants, Italy calls for the burden of managing the external borders of the Union to be shared between the national and European levels (see EUROPE 11451). This new sharing of sovereignty “requires different funding sources and would justify the recourse to a mutualised funding mechanism which could entail issuance of common bonds”, it stresses. (Original version in French by Mathieu Bion)