Italy Rejects ESM

Politics - December 30, 2023

Italy has said no to the ESM. The Italian parliament has voted against the reform of the bailout fund. The left was already, as always, ready to declare the failure of the Italian state and its economy. Yet, nothing of the sort has happened.

The government’s negative vote came from Fratelli d’Italia and Lega, while Forza Italia abstained. All of this did not in the slightest question the stability of the government, which has consistently been clear about its positions on the matter. However, for a brief moment, it seemed that the ESM was about to be approved, with various left-wing representatives and journalists ready to celebrate a possible change of mind by the right and a consequent division within the coalition. And indeed, the ESM was about to be approved but as a means to open a credit line for Italy and negotiate in Europe on more important issues for the country.

Instead, Fratelli d’Italia and Lega showed no hesitation when it came to voting. They were perfectly consistent with what they had said in the past: the ESM in Italy will not be approved by a center-right government. Inevitably, accusations and prophecies of misfortune arrived: distrust from investors, speculators ready to strike Italy, the European Union losing confidence in Italy, and so on. All false. Without delving into the real economy, where recent consumption and inflation trends demonstrate that Italy is a vibrant and certainly not a moribund country, the markets have also demonstrated their indifference to the Italian decision. The spread, last Friday, closed at 157 points (not seen since last June), and the yield on BTPs is at 3.5% (the lowest since August 2022). As for the stock market, the FtseMib index is above 30,000 points, the highest since June 2008.

“I haven’t seen European stock markets collapse, and it doesn’t seem to me that the spread has skyrocketed,” commented Marco Osnato, FdI president of the Finance Committee in the Chamber. He attacked: “If France and Germany haven’t taken it very well, it’s because they have some more concerns than us about the stability of their banks. It seems normal to me.”

Giancarlo Giorgetti, Minister of Economy and Finance, also responded during an hearing to the many opposition members who accused him in recent days and called for his resignation. Incidentally, the call for resignations is not a great novelty, as since the right came to power in Italy, the left has practically called for the resignation of all its members.

“Some things need to be clarified in some way – Giorgetti begins – I have never said in Parliament, in European forums, or in any other venue that Italy would ratify the ESM. I have read absurd and totally false things. In European forums, I reminded that the Italian Parliament, which was competent and sovereign on the matter, had postponed the vote in response to a request from the opposition.” He concluded by explaining that he had already anticipated in European forums what the vote of the Italian parliament would be, including Movimento 5 Stelle.