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Italy will speak in favor of reform of the Treaty that establishes the Month because a possible veto would not be “coherent“With the resolution of the Parliament of December 2019 there would already be”negative relapsesAlso in the markets. These are the conclusions reached by the minister Roberto Gualtieri during the liaison with the Budget and Finance committees of the Chamber and the Senate to report on the reform with a view toExtended Eurogroup you will have to give the green light. The yes to the reform, clarified the head of the Treasury, has not nothing to see with the current use of the pandemic credit line of the Fund, to which 5 star movement it stands strongly against it and on which every decision “must be approved by Parliament.” The M5 political leader Vito Crimi agreed: “We do not intend to adopt a obstructive approach and we will not prevent the approval of the modifications to the treaty, regarding which there are no reliefs, to allow other countries to use the instrument if necessary. “The Movement” reaffirms its absolute opposition to the use of the Month. “And on Monday the premier Giuseppe Conte in an interview with Corriere della Sera He stated that “We do not need the Month, Italy does not need it.”
The head of the Treasury affirmed that Italy has managed to include the reform in a “logic of package“Along with the anticipated introduction, from 2022, of the”common cap“, That’s one safety net for the banking sector in case of crisis. And he brought home “revisions to improve” the text. Reach an agreement, he said, “ strategic importance to strengthen the banking union and provide more safety net financial stability. “In addition, during the Covid crisis theEuropean Union she became more supportive, approved the loans Of course to finance the cig and the maxi fund Next generation UE (now blocked by the vetoes of Hungary and Poland) putting the Commission and the community process at the center, which “reduces criticism and doubts”.
After the political agreement within the Eurogroup, the signature is expected for the next January 27th “And Parliament, obviously, will be able to say what it wants to authorize it.” Before that date, the heads of state and government will discuss it with the next advice of the December 10 and 11, a crucial appointment for the Italian government because on December 9 a resolution will be voted in Parliament in which M5 I would like to insert that Italy has no intention of applying for the controversial loan for the healthcare system. However, excluding its use is inadmissible for Pd, Iv and Leu. The oppositions are also divided, with BE in favor and League me Brothers from Italy according to which “it is a rope” for Italy.
M5s: “Absurd to modify it only in some notes”. Borghi (Lega): “Gualtieri warned” – Dai parliamentarians connected in the audience, including the majority, have arrived criticism and doubts. For the senator of the 5 Star Movement Laura Bottici “There is still talk of modifying the Month only in some points absurd. The changes proposed at the European level almost a year ago were and still are wrong. The world has changed, Europe has changed ”. The Northern League Claudio Borghi he has “warned officially and formally “Gualtieri to approve the reform and argue that the approval has the support of Parliament, adding that” we still do not have the new text. However, as Gualtieri mentions, it is also available on the website of Senate with the two versions before and after the changes. On the other hand, some second-level documents are missing “because they have not yet been finalized, they will be today,” the minister clarified, also responding to Renato Brunetta, economic manager of Forza Italia, who asked “to know to deliberate”. And, he said, “I look at the lack of information, not so much in the reform of the ‘first phase’ of Mes, but in the new implementations that, if implemented, would represent a step forward compared to the past. On this we would like to see the documents, documents and materials, which are not yet available to Parliament ”. Stefano Fassina from LeU defined “fool They claim we approved the ESM patch, but we didn’t use it. The damage stems from the regulatory changes that aggravate the risk of restructuring the public debt and related program of the Troika“.
Common Safety Net Breakthrough and “Opportunity” – Gualtieri for his part insisted on the positive results obtained by Italy during the negotiations on the new treaty and its context. “Originally, the interventions were in sequence: Month reform, risk assessment, early introduction of common support. Now, thanks also to the Italian initiative, these three moments would coincide. The introduction of the common backstop in 2022 would take place in a context of positive evaluation of the state of health of the European and Italian banking system. It is an opportunity that must be seized “because it would lead” to Exclude others restrictive or sanctioning measures for our banks“. The minister did not stop emphasizing that” the risks are not just late payments (impaired loans, ed) but also the composition of assets that can also include opaque elements , the call level two and level three“An indirect reference to the financial statements of institutions like the German German bank. Therefore, “we will work to ensure that decisions on the entire package are made today and that the two processes of signing and subsequent ratification of the Mes treaty and the reform of the supporting reform are initiated together”, but also because “the contributions Edis (the common insurance of bank deposits, ed.) are not linked to the amount of government bonds that appear in bank balance sheets. “
With the treaty modification, MES resources can be used to support the Single resolution fund financed by the banking system in case of resolution of an institution. The resources available to the Fund could be insufficient in the event of a systemic crisis: hence the need for a public “network” to reduce the risk that the eventual crisis of a large bank will occur in a “disorderly” manner, generating instability. Since the beginning of the negotiations on the single resolution mechanism, Italy has supported the need to provide support that involves the ESM. The reform foresees its introduction at the end of 2023 at the latest, with the possibility of a move along in view of the advances in the reduction of banking risks. An advance on which the Eurogroup could agree precisely today.
Changes in loans and the problem of debt restructuring – The minister then reviewed the other aspects of the reform, fromfinancial assistance at the heart of debt restructuring. The reform reiterates that a preventive is needed for granting loans debt sustainability assessment and is based on the criterion of the loan repayment capacity: controls that Month and Commission must perform with a “margin of discretion sufficient. “In the case of prudential loans to countries whose debt is not sustainable, the signing of a Memorandum but only a letter of intent. On the other hand, countries that, despite having solid economic foundations, do not respect all the established criteria, will be able to obtain a “strengthened” line of credit, with a memorandum. In addition, the discipline of the so-called “collective action clauses“Which are activated in case of default: in the event that a country decides renovate the debt, for the approval a single resolution of the holders of public securities would suffice. According to opponents of the reform, the mere act of evoking a restructuring puts countries with very high debts at risk.
“Nothing changes in the debt sustainability assessment” – Second Bank of Italy, “As already happened with the introduction of the current CAC in 2013, this modification – which does not increase the probability of a default, but reduces the uncertainty around its outcome: it could favor a decrease in risk premiums on sovereign debt ”and“ the participation of the private sector, which remains strictly limited to cases exceptional“. Gualtieri stressed that it is not” in any way request a debt restructuring for access “, it is up to the State to decide whether to activate the cacs, how to do it and how to group titles and subtitles. Regarding the debt sustainability analysis, the principle by which it was agreed was carried out in a transparent and independent manner by the Commission according to the Month that will evaluate the repayment capacity. From this point of view nothing changes because it is already like that in the treaty“The Months are not assigned fiscal surveillance tasks” and “the decision-making mechanisms remain unchanged”, because “the finance ministers who make up the board will be the ones who have the last word in all relevant decisions”. The Month, it must be remembered, is led by a Board of Governors made up of the 19 finance ministers of the euro area, who unanimously make all key decisions, including those regarding the award of financial assistance. In addition, the minister recalled that “for Italy and for all the high member states of the recent EU Commission, the ECB and the ESM have made a debt assessment for the eligibility criteria for the ESM pandemic line, and our debt has been judged sustainable. “
“Respect for the resolution of December 2019” – Gualtieri finally specified that “we are well within the perimeter and also beyond the resolution majority approved by Parliament “in December 2019, which asked, among other things, to continue in the logic of”package” with banking union me deposit guarantee and, obviously, he asked “to exclude any mechanism that involves a automatic restructuring of public debt” as much as “restrictive interventions in sovereign bond holding by banks and financial institutions and risk weighting of government bonds by reviewing them prudential treatmentRegarding the request to “propose in the next stages of the negotiations on the Banking Union the introduction of the common deposit insurance system (Edis) and a secure european bond (common call safe asset – for example Eurobonds) ”, According to the minister, this result should be considered given that the Commission will issue common bonds to finance the Recovery fund.
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