MILAN, July 6 (NNN-AGENCIES) — Italy’s lower house of parliament decided Wednesday to postpone for another four months a highly contentious vote on ratifying the eurozone’s bailout fund.
Italy is the only country that has not yet ratified a 2021 reform of the European Stability Mechanism (ESM), which strengthened the fund’s financial firepower and increased its authority to supervise countries in difficulty.
Prime Minister Giorgia Meloni’s right-wing coalition government is torn between deep suspicion of the ESM and pressure from EU allies to green-light an accord that cannot be implemented without approval of all national parliaments.
The government on Friday sought the delay, with Meloni saying Monday that she believes it “contrary to the national interest to accelerate ratification of the ESM reform.”
Wednesday’s postponement came after opposition lawmakers brought forward a measure to ratify the ESM, with government coalition lawmakers still divided on the subject.
The postponement was carried by a vote of 195 to 117.
Meloni has stated clearly she would never use the ESM, which provides eurozone states in difficulty with loans at below-market rates in return for reforms to public finances.
Spain, Portugal, Greece, Ireland and Cyprus have all used it, but many in Italy consider it a tool for northern European countries to impose austerity on the south.
Italy is also wary of being forced to restructure its enormous debt, valued at 144 percent of GDP, the highest ratio in the eurozone after Greece.
The EU is currently debating reform to its fiscal rules, known as the Stability and Growth Pact, which set limits on member states’ budget deficits and debt.
Meloni also said Monday it was not a good time to ratify the ESM reform as “the government is in decisive negotiations on the modification of the stability pact and banking union.”
The pact, which sets maximum limits for public deficits and debt, was suspended in 2020 due to the pandemic and is due to go back into force at the end of this year. — NNN-AGENCIES
