(by Massimiliano D'Elia) Yesterday a letter was sent signed by the vice president, Valdis Dombrovskis, and the Commissioner for Economic Affairs, Paolo Gentiloni to the president of the Eurogroup Mario centeno. Today there will be a video conference of eurozone finance ministers. In the letter it was pointed out that as regards the MES funds (2 per cent of the GDP of each country) there will be no intervention by the Troika (ECB, IMF and Commission) but only checks by the Commission on direct and indirect healthcare costs made with the funds. (for Italy on the basis of GDP, we are speaking of just under € 37 billion).
As Milano Finanza writes instead, post-program surveillance remains, until up to 75% of the loan is repaid, applying, in fact, Article 14 of the Regulation, except paragraphs (2) and (4). This is the sore point that provides for external surveillance interventions and probable guidelines, therefore, on the economic policy of EU countries that are unable to honor their debts.
The eyes of the finance ministers are now, however, all on the Recovery Fund which will be linked to the EU budget 2021-27 and later, but to date it is still an empty container. A firepower that of Recovery Fund which would bring to the European Union an injection of liquidity equal to over 1500 billion, to be added to the 540 billion already foreseen by commitments of ECB, Bei, Fondo Sure and Mes. (Italy would have about 90 billion euros available as early as next month).
The difficult point of the enormous liquidity of the Recovery Fund (1500 billion) is the reimbursement method, that is to say, as required by the countries bordering the Mediterranean, Italy, France and Portugal, a not negligible quota (at least half) in depth. Request, the latter, opposed by the countries of the northern axis, Germany, Austria, Holland and Finland.
Then there is the question of the ruling of the German Constitutional Court. There Karlsruhe court partially rejected the ECB's purchase plan (PSPP, Public Sector Asset Purchase Program) of March 4, 2015, after having asked, again, the opinion of the Court of Justice of the European Union, which expressed itself in December 2018 for the full compatibility of the PSPP with EU law.
A position that could slow down the current purchase by the ECB of the bonds of countries in difficulty, such as Italy. The ECB yesterday, in a note, made it known in this regard that the Institute is independent and not bound by external decisions, so the governor Christine La Garde"The ECB goes on undaunted ".
The German applicants had asked the judges to reject the 2015 ECB measure (Draghi's famous bazooka, Quantitative Easing) because in violation of Article 123 paragraph 1 of the Treaty on the Functioning of the European Union (namely the prohibition of financing of member states). The German court justified in the ruling that the program presents instead - at this point the German court in Karlsruhe fully recovers the opinion of the European Court - sufficient guarantees (thanks to some conditionalities: limited volume of purchases, time limit, etc.) for its full compatibility with European law and also with the German constitution.
La Karlsruhe Court, excluding that the plan violates Article 123 of the Treaty, asks the ECB to verify all the consequences in a more objective and transparent way, in such a way as to guarantee that the Courts can also appreciate its proportionality.
The German Court, meanwhile, therefore prohibits the German Central Bank from taking part in the plan if the Central Bank Council does not present a detailed plan within three months to verify the effects of economic and fiscal policy. With the important clarification that, once this assumption is fulfilled, the German Central Bank is obliged to take part in the plan as well as in future ones.
Economic measures in Italy
The Minister for Agriculture, Teresa Bellanova carries forward the proposal to regularize laborers, home helps and irregular carers, under penalty of resignation. Among the measures under study, tools to recapitalize companies. The intention is to leverage incentives or forms of tax relief to avoid the presence of the state in the boards or forms of nationalization. The business package envisages non-repayable resources for small companies under 5 million in revenues and state participation in the recapitalization for those between 5 and 50 million in turnover. For non-repayable interventions there will be a total of about 15 billion, of which 5 billion to confirm the bonuses 600 euros, increasing them for another two months. Most likely, on Sunday or Monday, the approval of the decree.
The political situation
The Northern League player Giancarlo Giorgetti fears chaos and would be working for an interview with the President of the Republic Sergio Mattarella. Silvio Berlusconi has called for a turning point in Parliament, even if he admits that this eventuality is still premature. The united center-right presented a motion of no confidence to the Minister of Justice, Alfonso Bonafede, for the Di Matteo affair.