On Friday 15 September, the President of the Eurogroup, Paschal Donohoe, warned Italy against a possible failure to ratify the revision of the international treaty establishing the European Stability Mechanism (ESM), the euro area’s permanent rescue fund (see EUROPE 13203/7).
“If Italy does not proceed with the ratification, it is not only Italy that will not benefit from the safety net that the ESM will provide, but this will not be possible for the whole euro area”, he declared at the end of the Eurogroup meeting, convinced that the Italian authorities were aware of the “European dimension” of this delay.
Although the Eurogroup is keeping up the pressure on Italy at each of its meetings, a positive outcome on this issue remains highly uncertain. Discussions in the Italian Parliament have been postponed until November. And members of Giorgia Meloni’s Fratelli d’Italia party and Matteo Salvini’s Lega see the ESM as an instrument for imposing economic austerity on euro area countries that are on financial life support.
As for the Executive Director of the ESM, Pierre Gramegna, he indicated that it would only take a few days for the ESM to become the safety net for the Single Resolution Fund (SRF), the financial arm of the ‘resolution’ component in the euro area, due to the preparations already made. “Operationally, we’re there”, he noted. (Original version in French by Mathieu Bion)