What the editorialist Wolfgang Munchau wrote on the ESM (and not only the ESM), already at the Financial Times for 17 years until two months ago, on the Eurointelligence.com website.
Fortunately we are too young to remember Radio London, and we have never listened to the famous “Colonel Good evening”, Harold Stevens who, during the last war period, spread news in contrast with the fascist propaganda.
In the same way, almost 80 years later, fortunately we are not at war, at least the one fought with bombs and rifles, but we must still refer to the foreign press to read clearly and without mincing words, what is behind the reform of the Mes .
In this regard, what was written on Friday by the prestigious columnist, already at the Financial Times for 17 years up to two months ago, Wolfgang Munchau on the Eurointelligence.com website: sooner or later we will find the Stability Pact and the Fiscal Compact again in force and with the ECB which, at best, will not make additional purchases but will only renew the maturing securities. What will the markets think of a country forced to reduce its debt / GDP to pre-Covid level by 2031, as the Government plans, at the rate of 2.5% per year, from 160 to 135%
Not to mention 5% per year for 20 years, as required by the Fiscal Compact, which requires reducing the debt / GDP in excess of 60% by one twentieth per year. It is not difficult to see the revolver of the spread spin in the hands of the EU Commissioner on duty.
After this premise, Munchau describes the role of the “reformed” Mes in this future scenario:
“The underlying meaning of these efforts was to prepare the ground for the restructuring of the Italian debt, without explicitly stating it”, comments Munchau, who adds: “The Italian government knows this and has delayed the ESM reform as much as possible by exploiting differences on the banking union. An ESM (macroeconomic adjustment) program would be anathema in Italy, but it is time for a sincere discussion to open up on this thorny issue “.
Munchau lays bare the excuse of the “package logic”, behind which President Giuseppe Conte entrenched himself from the European Council on 21 June 2019. It has now lost all credibility, both in public opinion and in Parliament: the Mes travels from only, the budget for convergence and competitiveness has been abandoned to make way for the EU Next Generation (which, however, is a temporary and extraordinary initiative) and the completion of the Banking Union is lost in the mists of Brussels. And, above all, it highlights the true role of the ESM: it is a tool to make a restructuring of the public debt manageable in an orderly manner. Purely and simply. And it produces damage for the mere fact of existing because it facilitates a self-fulfilling prophecy (recalled by the governor of Bank of Italy Ignazio Visco in November 2019), Well summed up by Murphy’s Law: if something can go wrong, it will. And even at the worst moment, we add.
“The sincere discussion” hoped for by Munchau is unfortunately a chimera: in Italy we are forced to listen to interventions that magnify the ESM reform because it would constitute a loan-parachute of 68 billion in favor of the Fund for the resolution of banking crises, which should reach shortly an endowment of 60 billion.
No one would add that if a major bank were to blow up, a tsunami would arrive, compared to which the Resolution Fund would appear to be foam on the shoreline. Italy has already given, between 2010 and 2012, by lending around 58 billion (including direct loans and guarantees) finished, via Greece, to save the Franco-German banks.
The only valid reform of the Mes is the one that starts it towards an orderly liquidation, returning 14 billion paid-up capital to the Treasury coffers.

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