(by Massimiliano D'Elia) Late yesterday evening the president of the Eurogroup Mario centeno showed his appreciation, in reference to the speed of the timing and the amount of funding made available to counter the economic emergency: "I want to clarify that the new credit lines will not entail particular stigma, they are available to all countries in the euro area, at standard conditions for all and without a so-called troika at the time of monitoring". This means that however there will be monitoring, in fact, art. 14 of the Mes Treaty except for paragraphs 2) and 4), for a more mild control / monitoring and referring only to direct and indirect health care expenses. The fact is that, however, if unable to repay the debt, there will be a steering intervention by the Commissioners. Then they have already announced that the stability pact will return at the end of the Covid-19 emergency, as well as the safeguard clauses on VAT. A stroke of genius, with forecasts of average European decrease of 9,8 percent for the year 2020 alone.
The countries that will benefit from the ESM funds will be able to receive loans equal to 2 percent of GDP for the year 2019, for Italy about 37 billion euros.
The agreement reached yesterday between the financial ministers, writes the Sole24Ore provides that the loans, which can be requested until 2022, have a maximum duration of 10 years on average. For the interest rate applied, the press release specifies that it is a lower cost than normal loans from the Mes. That is, equal to 23.5 basis points in the first year, as an entry fee and 10,3 basis points subsequently as a margin. Yesterday there was also talk of a standard form for applying for loans. Apparently at the end of the works it was also approved.
The Commissioner for Economic Affairs, Paolo Gentiloni, on the sidelines of the works commented: "the light monitoring proposed by the European Commission was accepted, limited to the consistency of the expenditure with the set objectives".
Naturally, each state has the possibility, through its own internal constitutional forms, to decide whether or not to accept MES funding. However, it is the speed with which this funding could be most attracted to governments. Indeed the president Mario centeno said: "we expect the board of governors of Mes to adopt a resolution that confirms this well before June 1st".
Among so many news, the most interesting one, the possibility of starting one "infringement" procedure against Germany, in reference to the interference of the German judgment on the ECB's monetary policies of 2015. The news was announced yesterday by the commissioner gentlemen, who then added: "We are studying in detail the legal reasoning of the German Constitutional Court before working on the Recovery fund which will not be usable for a few months while the approximately 37 billion of the Mes for Italy are available immediately".
In this regard, the European Court of Justice that has reaffirmed its pre-eminent role in ensuring the application of Community law.
With reference to the 540 billion loan package from the ECB, the EIB and the Sure Fund, the European Investment Bank has only confirmed the 200 billion in aid to businesses, while negotiations are still underway on the Sure Fund for layoffs. For the issuance of bonds by states for purchase by the ECB, we are still on the high seas, also in light of the German court ruling.
The aspect that most emerges from the international meetings is that the first and perhaps only credit line available at the moment is that guaranteed by the ESM, starting from the beginning of June. To work on the other measures, as I have always thought, it is first necessary to “accept” the loan from the Economic Stability Mechanism, Mes. A kind of loyalty card, to then be able to access other things, as long as you behave well. As is done with the large distribution chain, which in order to access the discounts must first obtain the "loyalty" card.
In Italy the Democratic Party, Iv but also Forza Italia push to ask for the loan of 37 billion from the Mes. Lega, Fratelli d'Italia and most of the 5 Star Movement, on the other hand, categorically reject this possibility, effectively opening up to yet another government crisis. Likewise, Prime Minister Giuseppe Conte does not trust the Mes and pushes to start talking "seriously" about the Recovery Fund, or other more immediate financial formulas that do not force the EU countries towards a single road, which is however very impervious and tortuous, whose effects could undermine the stability of the entire Eurozone.