Here are the hoaxes of the newspapers on the Mes
What paper newspapers write and what they don't write about the Mes. The deepening of Giuseppe Liturri
We do not know how the (alleged) political dispute relating to the ratification of the Mes Treaty will end. Everything is foreseen in politics, even the improbable event of the suicide of the political majority who decide to split by voting for an opposition bill, forcing President Giorgia Meloni to go up to Colle.
We know with reasonable certainty that the stakes are high, at least judging from the last resort tones, which sometimes border on the ridiculous or hypothesize turbulence on the government bond market, where, however, hypotheses cannot be made freely, because the penalty would be triggered . Below, a random guide to the slight "inaccuracies" we've only had to read in the past three days.
"a dangerous about-face with Brussels given that Italy remains the only defaulting country." (B. Fiammeri – Sole 24 Ore 24 June 2023)
No, not ratifying is not a breach but a Right of Parliament provided for in Article 80 of the Constitution. Default is typical of an obligation, and there is none here. It would be appropriate to return to the manuals of civil law and constitutional law.
“The truth, however, is that the fissures are getting wider and wider over the ratification or otherwise of the reform of the State-saving Fund. Moreover, it is the reason that on Thursday prompted the deputies of the majority to abandon the work in the Commission after the opinion of the head of the cabinet of the Economy Minister Giorgetti had instead promoted the reform, going so far as to define it as convenient for Italy. (B. Fiammeri – Sole 24 Ore 24 June 2023)
The opinion of the head of the cabinet did not "promote" anything. And the deputies simply let the opposition choose the basic text (there were two identical ones) on which the majority should then vote no. Members have made better use of their time.
“As for the rest, yesterday's loophole tries to buy some more time, even if the weeks that pass are unlikely to produce political solutions while certainly damaging the Italian image in the eyes of the other EU countries. At least in theory, the curious story that took place yesterday in the committee with a bill that advances thanks only to the votes of an opposition piece while the missing majority could repeat itself in the Chamber, where the vote of the majority of the present. On a political level, it is evident that the hypothesis presents some more complexity, but perhaps less than the alternative of an Italy which alone in the Eurozone blocks ratification, stopping the reform also for all the other member states. Because beyond the political convulsions there is the crucial question of the repercussions that our BTp could suffer in this case" (G. Trovati – Sole 24 Ore 23 June 2023)
Here we go again with the "fugitive" majority to which is added the dream of seeing them in hiding even in the courtroom; then we are curious to understand what are the sources that hypothesize "repercussions" for the BTPs. Beware of confusing forecasts with wishes, especially when you listen to market operators who have been trying to bet downwards on BTPs for months and come back regularly with broken bones.
"In the end, the Mes is a classic dossier to vote between July and August, get rid of it while the Italians go on vacation." (L. Palmerini – Sole 24 Ore 23 June 2023)
We really are at the last resort. In the literal sense of the word.
“the M5S is in favour, given that the agreement was signed by Giuseppe Conte when he was prime minister; the Democratic Party is in favor and has asked for its discussion, as are the parties of the former Third Pole; Forza Italia is in favour; while there are doubts and lacerations within the Lega and Fdi, who have fought fierce battles against the Mes over the years. But overall the numbers are there.” (L. Capone – Il Foglio June 20, 2023)
Granitic certainties that could melt like snow in the sun. For the moment we note them.
"With the reform, if necessary, the ESM could lend over 60 billion to the Single Resolution Fund, which could intervene to recapitalize a single institution, without involving national governments which would no longer have to sign any memorandum" (L. Borga – Il Foglio 26 June 2026)
It is a pity that the ESM loan to the Fund provides for even worse conditions (Annex IV of the reformed text). Including compliance with the bail-in regulation, because the Mes intervenes as a last resort, when the SRF does not collect loans even from the banks which, moreover, are the lenders of the fund itself. Do you remember the zeroed bondholders of Banca Etruria? Well, much worse.
"I recall that in the negotiation on the reform of the Mes, and in particular on the establishment of the so-called backstop, i.e. the safety net in support of the Single Resolution Fund for the management of banking crises, one of the Italian red lines, drawn not only by the changing governments Italians, but also indicated by the Bank of Italy, was the refusal to establish a debt sustainability assessment mechanism which could have triggered dangerous expectations for the financial stability of individual states, generating self-fulfilling prophecies. We fought to eliminate this eventuality and the battle was won. But now one gets the impression that there is an attempt to reintroduce this dangerous mechanism in another form” (G. Tria – Sole 24 Ore 5 December 2022)
Tria, who negotiated the reform of the Mes, highlights the dangers of assessing the sustainability of public debts, which however remained in the Mes (article 3). Maybe he remembers wrong. Lending for banking crises has passed and the red line has faded.
“With the microphones off, today it is difficult to find a leading leader of the League or of the Brothers of Italy who does not understand what is there for all to see: ratifying the reform does not mean being colonized by the Troika, it is risking being so; it is a marginal change and for the better of what already existed, because it creates additional protection in the event of a banking crisis; and a green disc would bring down the cost of the Italian debt – as the Treasury wrote to the Chamber – because it would be a sign of European cohesion […] therefore the ratification is postponed and will have to wait longer […] stability is at stake of public debt, the great normalizer of sovereignty that has risen to power: rejecting the ratification of the Mes today means putting the price of securities and the cost of financing the State at stake […] Letting the Mes pass – it will be said – means protecting Italian savers ” (F. Fubini – Corriere della Sera 23 June 2023)
The mythology of the decline in the cost of Italian debt is perpetuated because "the Treasury said so" (false, the MEF wrote a tenth degree hypothetical proposition, with three "ifs" in front). Unfortunately, the threat of the fate of Italian public bonds is repeated. Risky hypothesis, if not exactly irresponsible. How to play with the nuke.
"freezing the Mes – or worse, voting against it in the Chamber – is not exactly the best way to strengthen the confidence that Italy needs on the markets" (F. Fubini – Corriere della Sera 23 June 2023)
Italy's confidence in the markets is generated by the growth prospects and consequent sustainability of the public debt, which are currently among the best in Europe. The rest is talk.
“The Mes has evolved […] today the rules are different; We need to think about the advantages and disadvantages, without prejudice. the Mes is also a tool for land crises, different from the past. Minister Giorgetti is the best of the best European ministers, he knows things, the real risks, and it is up to him to explain his idea to the majority and show the way…" (G. Crosetto – Corriere della Sera 26 June 2023)
Crosetti is right. The Mes has evolved, for the worse. On the "land crises" we spread a pitiful veil. Was it the “health” crises?
“If Giorgetti recognizes himself in the line to the Mes dictated by his dicastery, it is also because he is fed up with European pressure. "During the meetings in Brussels – says an Italian diplomat – some even chased him into the toilets […] the political fact is that Meloni wants to have time to make his voters metabolize the Yes to the Mes […] The ratification of the Mes is unavoidable, otherwise we would not understand why the day before yesterday the premier and the minister of the economy joked for the entire duration of the meeting at Palazzo Chigi” (F. Verderami – Corriere della Sera 24 June 2023)
We conclude by easily breaking through the barrier of ridicule with Giorgetti being chased in the toilets in Brussels. Perhaps Verderami missed the hypothesis that they were laughing at the nonsense that one reads in the newspapers. To say that the Mes is inevitable because Giorgetti and Meloni laughed is a flight of fancy, not bad. If he had seen them serious, what would he have deduced?
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/mes-giornali-cosa-scrivono/ on Tue, 27 Jun 2023 06:20:44 +0000.