After Germany ratified the reform of the European Stability Mechanism (ESM) - the euro area’s rescue fund - in mid-December 2022, all eyes are now on Italy, which was waiting for the German Constitutional Court’s ruling on the reform before indicating how it wished to proceed (see EUROPE 13059/35).
“Everything is now in the hands of the Italian Parliament”, said ESM Executive Director Pierre Gramegna on Monday 16 January after the Eurogroup meeting, noting constructive discussions last week in Rome with Italian Finance Minister Giancarlo Giorgetti.
He said that Croatia, which became the twentieth member of the euro area in early 2023, will formally become a member of the ESM once the ratification procedure is finalised “in the coming weeks”.
The euro area permanent rescue fund will play an enhanced role in managing the macroeconomic crisis in the euro area and will be the lender of last resort for the Single Resolution Fund (SRF), the financial arm of the resolution component of the banking union (see EUROPE 12613/4).
The majority parties in Italy’s governing coalition, Fratelli d’Italia and the Lega, always criticised the ESM when they were in opposition, accusing the rescue fund of being an instrument in the hands of the euro area to impose austerity on member states that apply for ESM. (Original version in French by Mathieu Bion)