EU rescue Fund is useless-PM Italy
2022.12.29 15:01
EU rescue Fund is useless-PM Italy
Budrigannews.com – On Thursday, Italian Prime Minister Giorgia Meloni took aim at the EU’s financial institutions, stating that the euro zone’s bailout fund serves no useful purpose and instructing the European Central Bank (ECB) to communicate with greater caution.
Meloni added her voice to the criticism leveled at the ECB this month by some of her top ministers during a three-hour end-of-year news conference. She said the ECB should avoid making “choices that make things worse” for the economy of the bloc.
The European Central Bank (ECB) raised its benchmark interest rate by 50 basis points at its most recent meeting, as was widely anticipated. However, it also indicated that additional hikes would occur in the coming months, resulting in a sell-off of Italian government bonds.
According to Meloni, “It would be useful if the ECB handled its communication well… because otherwise it risks generating not panic but market fluctuations that nullify the efforts that governments are making.”
Regarding the bailout fund for the Eurozone, Meloni stated that she believed no one would ever use the fund in its current form and gave no indication as to whether Italy would ratify a treaty to reform the so-called European Stability Mechanism (ESM).
The ESM reform, which would assign the organization the responsibility of providing a backstop to deal with failing banks within the framework of the Banking Union, is being held up by Italy, the sole nation in the Eurozone.
Additionally, it would simplify the restructuring of sovereign debt in the Euro Area.
Meloni stated that “I fear the fund will never be used” due to “too stringent” conditions and “a series of disadvantageous things” for any nation applying for an ESM loan.
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Meloni, who was in charge of a right-wing coalition when she took office in October, said that “rather than ratifying the reform,” she wanted to meet with the director of the ESM to see if the fund could be used in a different way.
When she was in opposition, Meloni, leader of the hard-right Brothers of Italy party, strongly opposed the ratification of the reformed treaty.
She described the ESM as “something different, something vaguely usable, with different and less conditionality… and objectives that are more focused on our priorities” without providing further details.
