Because the majority agreement on the ESM is a negotiation suicide

9 December 20203 years ago babelfish

The draft of the majority resolution on the ESM which seems to have succeeded in silencing dissenting voices within the M5S constitutes a negotiating suicide. That's why according to Giuseppe Liturri

A draft of the text of the majority resolution on the ESM has been circulating for a few hours and seems to have succeeded in silencing the dissenting voices within the M5S .

Given that it is a text that can be modified at any time before the vote in the classroom tomorrow, December 9, in the opinion of the writer it is a tragic negotiation suicide, which drags the fate of the country for many years to come.

Net of the long passages on the objectives of the Next Generation EU ( which is blocked pending the Euro Summit on Friday 11 , convened to overcome the deadlock created by the refusal of Hungarians and Poles to submit to the blackmail brought about by a Regulation on the rule of law ), the relevant steps are as follows:

found that:

a Euro Summit will be held in the margins of the European Council in an inclusive format;

the Eurogroup of 30 November 2020 agreed to proceed with the reform of the European Stability Mechanism (ESM), with the signing of the revised treaty and the start of the national ratification procedures;

any decision on the use of the ESM health credit line is only taken following a prior and specific parliamentary debate and subject to the presentation by the Government of a needs analysis, as well as a detailed plan for the use of any financing;

the reform establishes a common support (so-called backstop) to the single resolution fund (SRF) of banks in the form of a credit line from the ESM, as a guarantee of last resort. Ministers also agreed to anticipate the introduction of such joint support by early 2022;

here a distinction is made between the ESM reform and the use of the Pandemic Crisis Support (PSC) credit line launched in May. However, there is a detail that escapes: if and when this line is used, this will happen because the country will no longer be able to finance itself on the markets and will be forced to apply for this loan . Continuing to propagate the misleading idea that an ESM loan can be a discretionary choice is a pious illusion.

For those with a short memory, we suggest that they review the parliamentary debates of 2012, on the occasion of the approval of the Fiscal Compact, of the budget balance in the Constitution and of the ratification law establishing the Mes. With the gun pointed at his temple, he says yes to everything.

But the really distressing, embarrassing, ambiguous and destructive part for the fate of the country is the following:

" Commits the Government to: […]

with regard to the Eurosummit:

to take note of the negotiation changes made such as the advance of the "common back stop of the Single Resolution Fund for banking crises" and the new context of European fiscal policies implemented starting from the EU agreement on the MFF of 21 July last and negotiated with European Commission and Parliament. To reiterate that this reform cannot be considered conclusive, given the logic of the package already reiterated by Parliament , precisely in the light of the latest choices made within the EU which describe a new season of necessary changes . Themes that will be central to the Conference on the Future of Europe with prospects for changing the institutional and economic architecture of the EU;

to finalize the political agreement reached with the Eurogroup and the Eurosummit agenda on the reform of the ESM Treaty ;

to support the profound modification of the Stability and Growth Pact before its reintroduction, the implementation of the Edis, the European bank deposit insurance system, and also a process that goes beyond the intergovernmental character of the ESM itself, which are priorities for our Country in order to build a new season of European integration. The progress of the work on these issues on the agenda will be verified in view of the parliamentary ratification of the reform of the ESM treaty; "

Now, all the mitigating circumstances are understandable and there is no lack of:

We are in the middle of the approval session of the budget law and of the “Ristori” decrees, intended to mitigate the effects of an economic crisis that is unprecedented in peacetime.
At the European level, a delicate negotiation is underway for the definitive launch of the EU Next Generation, which on Friday 11th will see a perhaps decisive transition, otherwise we will not see a cent for the whole of 2021.

But nothing can justify the myopia that prevents us from seeing a negotiated suicide of epochal proportions, in fact:

While acknowledging the existence of a package of reforms and a " new season of necessary changes ", the green light is given to only one element of the package (the ESM reform), leaving the rest undefined and entrusted to the hope of a smoky " Conference on the future of Europe ”. That is, a reform is approved without, apparently, knowing anything about the outcome of the other requests made by Italy. A “refined” negotiation technique that can only lead to unfavorable outcomes for Italy also on the front of the other reforms, at which table we will present ourselves with bargaining power close to zero. The pressure exerted in recent weeks by our European partners will very likely be replicated. It will never be the right time to say no.
The " profound modification of the Stability Pact ", the realization of the EDIS, the " overcoming " of the Mes, are all issues on which there is a profound division in Europe. And on which the German bloc with its satellites has positions diametrically opposed to those suited to our interests. With what bargaining power is it expected to achieve even one of these results in the future, if we have not been able to oppose now a reform of the Mes that worsens the harmfulness of the original plant? How do you approve a reform and simultaneously ask for it to be overcome? Too hard not to approve it right away? Is there a more glaring contradiction?
But it gets worse. The other reforms under discussion are already on an unfavorable path for our country. So those who delude themselves and deceive the Italians about a reasonable compromise between the reform of the Mes accepted today and other reforms favorable to us that will arrive tomorrow, while knowing that they are lying. There are two letters from the President of the Eurogroup, Pascal Donohoe, dated 4 December, in which the work in progress on the completion of the Banking Union is reiterated. In both it is clear that the “prudential treatment of government bonds in bank balance sheets” is being evaluated in order to address the problem of the link between public debt and bank balance sheets. This would be yet another fatal blow inflicted on our country. And it's already all black and white.

How can we think, in the face of this probable negative outcome of the other negotiating fronts, of giving in on the equally harmful front of the ESM reform? When we lose on this front too, no one will be able to say they didn't know. In fact, it will be easy to prove, in hand, that he could not fail to know about the threats that already loomed over Italy and that have been culpably ignored.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/perche-laccordo-di-maggioranza-sul-mes-e-un-suicidio-negoziale/ on Tue, 08 Dec 2020 21:41:08 +0000.