(By Massimiliano D'Elia) In 4 days the Eurogroup will meet and in seven days (next Friday) there will be another confrontation between the heads of state and government of the EU countries. The last time they met, in a 6 hour river teleconference, it risked that the European Union disappeared into thin air with a click of the keyboard, interrupting communication.
There are many divergences and obvious intolerances between the northern countries Europe, Germany, Austria, Holland and Finland and those of the south, Italy, France, Spain and Portugal.
The countries of the north fear that the nations of the southern axis, already heavily indebted on average, will not be able to repay the debts and that they will use the money foreseen for the coronavirus emergency to cover part of those endemic debts that have brought their deficits at no longer sustainable values.
The risk that there could be an irremediable rupture between the EU countries has ignited the internal debate of the two nations, Germany and the Netherlands, which more than the others have opposed the soft line for coronavirus emergency funding.
Italian Prime Minister, Giuseppe Conte he acted with great skill by being interviewed by German and Dutch TV and newspapers. The premier's message was to denounce the risks that the European Union runs if these divisions are pursued, which could also become irremediable. He also assured the Dutch and Germans that their efforts will not pay off Italy's debts.
Conte opened a window when the other evening, during the live broadcast on unified networks, replying to a journalist, he declared that he could also evaluate a Mes with light conditionality, to be combined with other instruments.
Italy is aware that new instruments require medium-long times (from 3 to 9 months) which do not fit the immediate times required by the current emergency. The use of the ESM (with light conditionality) would, on the other hand, allow access to the anti-spread shield, thus allowing the ECB to purchase unlimited government bonds. In this direction, reports Il Messaggero, there would also be a convergence between our Minister of the Treasury Roberto Gualtieri and the French one Bruno La Maire. This convergence is supported from the idea the creation of a new fund, with a limited time, which is self-financed by the markets through bonds. The problem is that the time required for its creation is around 9 months, an eternity! The time factor could, however, be mitigated by direct interventions by the ECB and the EIB to attract new billionaire investments, using the light version of the Mes (very few restrictions and zero interventions by the Troika in national sovereignties).
Holland who fears measures to his disadvantage will put on the table the idea of creating a Covid-19 emergency fund only for health costs related to the emergency, a fund in this case without conditionality and with a very limited time.
In the majority of government, however, the Movement of the Stars is against the appeal to the Mes: He also threatened to return to the balcony (that of Montecitorio) to support the slogan: "Europe is at a crossroads, the ESM is not suitable, euro bonds are needed ". Thus approaching more and more to their former allies (League) who have long supported the same thesis.
I am sure that in the end a mixed solution will prevail between Mes light, new mutual funds, and probable corona bonds. The only certain thing is that Italy needs at least 400 billion euros to see the light after the night of the storm we are experiencing these days.