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the ME it breaks into the news again in the euro zone countries. Presented already as the main theme of today’s meeting, the news of the your approval for himEurogroup, a spokesperson revealed.
Reform the backstop also begins for the single bank resolution fund, with a safety net financed by the ESM which, as confirmed by the German minister Olaf Scholz – will be in effect since 2022, that is, two years earlier than initially expected.
the European stability mechanism it had been frozen in its guidelines about a year ago. Meanwhile, the tsunami pandemic has overwhelmed European states, focusing their political energies also at the EU level on the urgent need to save themselves from the crisis of the epidemic.
Today’s meeting ofEurogroup therefore, you are putting ransom fund reform in its original version in the spotlight (not as a tool designed for the Covid emergency to be used for health care costs).
The president of the Eurogroup had anticipated imminent approval, albeit indirectly, a few minutes before the meeting Pascual Donohoe, which at the end of the meetings confirmed the agreements and the arrival of a signature scheduled for January:
“We have reached an agreement on the ratification of the reform of the European Stability Mechanism treaty. The treaty will be signed in January, followed by national ratification procedures. Today we have also agreed to introduce the backstop in early 2022 ”.
The Commissioner for the Economy also highlighted his satisfaction Paolo Gentiloni, who spoke of “Excellent news for the security, stability and resilience of the Eurozone” .
MONTH: green light for Eurogroup bailout fund
At today’s virtual meeting of the Eurogroup, euro area finance ministers gave the final green light to stagnant changes in MONTH background.
The objective, as experts and official indiscretions anticipated in recent days, is to strengthen the resilience of the common currency area, considering that the pandemic increases future risks. Economic problems. And real financial failures.
“The objective is to finally reach an agreement on reform of the ESM treaty and the early introduction of support for the Single Resolution Fund“, had anticipated a senior official who participated in the preparations for the meeting.
What does that mean? First of all, it is important to remember that the European stability mechanism was introduced in 2012 to address sovereign debt crisis and it is presented as a kind of Monetary Fund for Europe, with its own structure, which is not part of the Community legal system.
Therefore, we are moving towards granting a bailout, with conditions that must be respected, when a State is in difficulty or at risk of bankruptcy. Specifically, the draft approved to date includes various reforms: speed up at the backstop (financial safety net for banks); simplify access to the precautionary credit line; promote greater collaboration between the EU institutions and the ESM; present the collective action clauses with a single vote of creditors, to facilitate debt restructuring.
With today’s deal, recently confirmed by a spokesperson, eurozone governments could sign in January and national parliaments could ratify it in 2021 to take effect before the end of the new year.
Eurogroup gives green light to support to “save” banks
The Eurogroup ministers have also given the green light to the implementation of the backstop, based on the report that analyzes risk reduction prepared by the institutions.
In practice, it involves the approval of a network of financial security for banksIn other words, use the resources of the ESM as a fund for bank resolutions.
Following the presentation of a report on bank risk reduction, the Eurogroup decided to approve the backstop mechanism with aearly activation, I’m already on it 2022.
The MEDE, in all its instruments, is for now the absolute protagonist of the meeting between European ministers.
