“Leaving the euro is not a taboo”, thundered Giorgia Meloni in 2019. Now in power in Italy, she has softened her anti-European rhetoric and is faced with a dilemma: ratify (or not) the mechanism of rescue of the euro zone (MES), without losing face.

A bill from the centre-left opposition aimed at approving the reform of the MES has embarrassed the right-wing and far-right government coalition, bringing to light the differences between the three allied parties.

First mess, a technical opinion sent to the deputies by the chief of staff of the Minister of Economy Giancarlo Giorgetti gave his blank check to the ratification of the MES, taking Fratelli d’Italia, the party of Mrs Meloni, and the League of Matteo Salvini, who are very resistant to it.

A support force for the coalition, Forza Italia, a party created by Silvio Berlusconi, who died in mid-June, had in the past supported, on the contrary, the option of a green light to the MES to prevent Italy from to be isolated in Europe, before qualifying his speech.

Another imbroglio, at the time of a first vote on the pro-MES bill in the parliamentary committee on Thursday, the government opted for the policy of the empty chair … paving the way for its approval by the opposition.

Created in 2012 after the debt crisis, the ESM borrows on the financial markets to provide loans at subsidized rates to the States of the euro zone in difficulty, which must in return implement reforms to clean up their public finances.

This European Stability Mechanism, from which Cyprus, Portugal, Greece, Spain and Ireland have benefited, comes up against deep mistrust in Italy, where it is considered an instrument of austerity imposed by Europe from the north to the countries of the south.

Italy’s other fear is having to restructure its enormous debt in the event of recourse to the ESM. It amounts to more than 144% of GDP (gross domestic product), the highest ratio in the euro zone after Greece.

“As long as I count for something, I can sign with blood the fact that Italy will not call on the MES”, promised Giorgia Meloni in December 2022.

As for its ratification, it intends to take all its time. A first plenary debate on the MES is scheduled in Parliament on Friday, but the ruling coalition is seeking to postpone the vote.

“We too are Europe”, but “being pro-European does not mean saying yes to everything that France and Germany propose”, declared Thursday the leader of Fratelli d’Italia in the Senate, Lucia Malan. As for the vote on the MES, “it will take place, but it could be a postponement”.

The government “intends to buy time to find a common line”, thus avoiding “exposing internal divisions in public”, explained to AFP Franco Pavoncello, president of John Cabot University in Rome.

At the beginning of 2021, all the Member States of the euro zone, including Italy, had signed a treaty strengthening the role of this fund, pending the green light from national parliaments for its entry into force. Italy is the only eurozone country not to have ratified the reform.

Rome “is trying to use the MES as a currency of exchange to obtain more flexible tax rules” within the framework of the reform of the Stability Pact, “which is a very risky strategy”, commented to AFP Lorenzo Codogno, former chief economist of the Italian Treasury.

Giorgia Meloni confirmed on Wednesday this fight carried out in the name of “the national interest”: in Brussels, “a global approach is needed, in which the new rules of the Stability Pact, the completion of the banking union and the mechanisms of financial safeguards are negotiated as a whole”.

Member of the League, “Giancarlo Giorgetti is in a difficult position, caught between pressure from other European finance ministers who are pushing for ratification and the government’s refusal,” said Mr. Codogno.

But, like other analysts, he is convinced that Italy will end up ratifying the reform of the ESM one day.

When she was in opposition, “the current majority had portrayed the MES as if it were the devil”, notes Carlo Cottarelli, economist and ephemeral senator of the Democratic Party (center left).

Now in government, “she must ratify the reform”, but she fears “a loss of credibility” in the event of an about-face, he commented to AFP.

Will the Italian government manage to extract compromises from Brussels? “Maybe they will get something, but I think the patience of the Europeans has reached its limits,” judge Franco Pavoncello.

29/06/2023 13:25:46 –        Milan (AFP) –         © 2023 AFP