To ratify or not to ratify the ESM, that is the question
Interview with Vito Monaco on Canale Italia, to talk about the problem of ratifying the ESM that Italy is trying to avoid.
Economy Minister Giancarlo Giorgetti went to Brussels for the Eurogroup meeting, where he explicitly admitted that he could not guarantee the ratification of the reform of the ESM, i.e. of the European Stability Mechanism, also known as the Salva-State Fund.
But the Italian strategy of stalling for time by asking for changes to the Stability Pact in exchange and focusing on the unbundling of investments in the ecological transition is defined as "without the possibility of success". And we can also be blackmailed on the Pnrr.
The European Union asks They want the minister to define a clear path, with a process that must be completed by October, at the latest November, because otherwise from January the banks of the Eurozone will not have a sufficient financial safety net to deal with any crises: the €77 billion of the Single Resolution Fund would be enough to cover only two or three medium-sized lenders.
What is not being said is that the ESM, which I had called the European Slavery Monster in the past, is becoming a European Bank-saving Monster. The banking crisis that began in the United States and also reached Europe with the near bankruptcy of Credit Suisse, prompted the ECB to raise interest rates and reduce QE, in order to blackmail Italy if it does not ratify the new version of the Treaty.
The ECB and the euro area banking system cannot afford the risk of remaining uncovered due to Italy, which is the only country that has not ratified it. Until now rightly so, but how long will it last?
Unfortunately we are guilty of being blackmailed. We have a financial wealth of 5000 billion euros and we continue to beg for loans from the financial markets instead of protecting the savings of Italians as required by our Constitution in article 47.
The management of the public debt mainly on the financial markets, combined with the measures recently implemented by Lagarde, puts us in a condition of continuous blackmail, so if we don't do what they tell us, they have financial weapons to put us in great difficulty with the spread .
Fortunately, there are solutions and they would allow Italy to manage its public debt "internally", ie with savings accounts specially set up to protect Italian savers. Furthermore, we can also use new exchange instruments with a fiscal value, such as transferable and carry-over tax credits, because today they have been made possible by the new Eurostat regulations, which continue to not consider them in calculating the public debt.
For those who want to explore these issues and our proposals, perhaps while having fun, we will put on a real theatrical show entitled "Money works miracles!" We will be in Bologna on 23 May 2023 at 20:30 in the 7 Gold Congress Hall.
Together with Sandro Torella and Claudio Testa we will experience an Economi-Comico show where we will try to talk about economics but with a smile and irony.
Fabio Conditioni
President of Positive Money
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The article To ratify or not to ratify the MES, this is the problem comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/ratificare-o-non-ratificare-il-mes-questo-e-il-problema/ on Mon, 22 May 2023 10:00:07 +0000.