Habemus Mes: agreement in the Eurogroup. M5s mumbles but says yes

It seems like a century has passed since last year, when just before Christmas the newborn Pd-M5 government faced the first difficult test of the pre-pandemic period: the reform of the Month, the League workhorse that managed to drag the cinquestelle. In a completely different climate, with the green light of the Movement, with another president of the Eurogroup – the Irish Pascal Donohoe instead of the Portuguese Mario Centeno – today the finance ministers of the euro zone have found the fateful agreement on the review of the States Hail: in a few hours.

European partners welcomed Italian Minister Roberto Gualtieri without the slightest doubt that he would bring the yes from Rome, convinced since last year that Italian support should only ‘go up’. Today a discussion surplus was necessary on the ‘backstop’, the guarantee fund for banks in crisis on which an agreement was also reached. German Minister Olaf Scholz wanted to introduce stricter criteria in the event of a “bailout” for banking institutions. Gualtieri stopped him. But today the real concern of euro zone finance ministers is called the “recovery fund.”

It was debated at the virtual table of the ministers gathered by videoconference. There are ten days left until the European Council on December 10 and 11 and there is not a shred of solution on the horizon to overcome the vetoes of Poland and Hungary. In the Eurogroup, it is the German Scholz, representative of the current German presidency, who warns his colleagues not to wait for an exit before the summit: “The leaders will have to manage it.” Actually, according to EU sources, the chancellor wants to wait another two days before drawing a line and possibly announcing that the mediation mission with Budapest and Warsaw has failed. According to what the German diplomatic representative would have said today at the meeting of the ambassadors of the member countries, on Wednesday Merkel should clarify that the knot is not resolved and we are going to the summit of 10 without an agreement.

A big problem that the Eurogroup has obviously addressed. Meanwhile, finance ministers have reached an agreement on the ESM. In times of pandemics, it does not seem like much: the covid has shown that Save States runs the risk of being a useless tool, since no member state is accessing the credit line established for health expenses for fear of giving the idea of ​​being on the verge . of the defect. But in the meantime, today’s reform extends the European Stability Mechanism to bank bailouts as well: in fact, the ESM is transformed from ‘Save States’ to ‘Save States and banks’. Who knows if the same fear of using it will also prevail in the future.

Meanwhile, the so-called ‘support’ becomes almost a reality, which should be active from January 1, 2022, two years before the initial forecast, provided that for next year the 27 EU national states ratify the new ESM in Parliament. Gualtieri and Scholz discussed this. The German minister wanted to eliminate the flexibility criteria in case of bank bailouts. The Italian line of maintaining them prevailed.

“The reform is an important result that allows a new step towards the realization of the Banking Union and risk sharing,” says Gualtieri, satisfied that he was able to ensure that the Mes reform was accompanied by the constitution of the common fund for banks. “The text is balanced, after intense negotiations – he continues – it is now in line with our conditions since it does not foresee any type of tightening of banking supervision rules and procedures and maintains all the elements of flexibility that we had requested.

“The reform of the ESM strengthens the euro and the entire European banking sector – says Scholz – We are making the euro zone even more robust against attacks by speculators and we are advancing the support for the bank settlement fund in two years, making hence more crisis-proof European banks and support for the real economy. After all, a stable banking sector is an important precondition for growth and jobs in Europe. “

Having made the deal in the Eurogroup, now the still hot potato is moved to Italy. The leaders of the Cinquestelle Movement have given their pass to the reform of the Month. “The reform of the Month and its use, the possibility of resorting to it, are two totally different elements – says Vito Crimi – We will not prevent the approval of the changes to the treaty.” But skepticism prevails among MPs and also among pentastelado MEPs, to say the least. “The ESM is an old tool, inadequate and incapable of giving an effective response to the economic and social problems that the pandemic is causing – says the head of delegation in Brussels Tiziana Beghin – The reform is a make-up and does not change its contours”.

In this climate, Italy will have to ratify the new Treaty next year, after the official signing on January 27. But of course, apart from the Movement’s internal stomach pains, the temperature of the majority has dropped drastically compared to the tensions of last year, when the Eurogroup gave Italy a year to mature the political conditions. Grow up, start the reform. On 9 December, Giuseppe Conte will also speak about it at the pre-European Council briefing in Parliament. It will be a first test for most.

However, questions remain. Not only on the fate of the recovery fund, but also on the ESM: whether for banks or for states, who will use it since so far all European states are keeping their distance?

“So far, the credit line established in the Month for the pandemic has not been used – answers the president of the Eurogroup Donohoe at a press conference – because the other European institutions have moved quickly, in a timely manner, to ensure the comfort of States on the covid crisis “. In short, this has widened the options, making the Saved States more marginal. The director of the MEDE, the German Klaus Regling, relies precisely on the reform to renew the image of the MEDE so that it can be used in case of need. “The agreement is a great achievement and the ‘backing’ will ensure the orderly resolution of the failing banks,” he says.

In any case, “the ESM is a pillar of the EU’s economic architecture,” says Donohoe. The opportunity to totally reinvent it, also with the support of ‘think tanks’ like the Delors Institute in Paris, is not a topic of discussion in the Eurogroup. “The Month is there to be used – continues Donohoe – the fact that it has not happened until now does not mean that it will not happen in the future.” And the president takes the opportunity to guarantee for each EU state: “We have full confidence that the level of debts” contracted in this period by the countries of the euro zone “is manageable and will be manageable in the coming years, and this confidence will be It is based on the way that my colleagues are handling the accounts and the fact that the interest rates are low ”.

However, Gualtieri’s different approach to the Month should be underlined: “We know that there are two trends in Europe: there are those who want to make Salva Stati a kind of EU Treasury Ministry and those who say, instead, that this role should be carried out by the Commission. I am on this second path and it seems to me that it is the one we have taken with the next generation EU: it will be the Commission that will issue the bonds on the market to raise the funds for the recovery. In Europe someone had asked the MONTH to do it … ”.