A planned reform of the European
Stability Mechanism (ESM) bailout fund is not a problem for
Italy, European Economic Affairs Commissioner Pierre Moscovici
said Friday.
He said an "automatic" mechanism on restructuring debt had
been avoided in the reform.
Moscovici added that he had discussed ESM reform with Premier
Giuseppe Conte and Economy Miniuster Roberto Gualtieri.
The EU is set to sign off next month on a reform that would
make the ESM more akin to the IMF, with support for States in
financial difficulty made conditional on debt restructuring.
Italy is considered by experts to be vulnerable to market
turbulence due to its huge public debt of over 2,000 billion
euros.
The reform was agreed by European finance ministers in June.
Premier Conte is said to be thinking about trying to postpone
the reform at an EU summit next month.
The proposed reform sparked a bad-tempered clash between
Conte and opposition leader Matteo Salvini this week.
Conte on Wednesday accused rightwing nationalist League
leader Salvini of being in a state of delirium after the latter
said the former had agreed to the ESM reform in secret.
The reform of the eurozone's safety net was negotiated in
June, when Salvini was interior minister and deputy premier in
Conte's first government.
Conte said Salvini had OK'd the reform "unbeknownst to him",
echoing a jibe made years ago about then interior minister
Claudio Scajola's denial of the purchase of a flat overlooking
the Colosseum.
"Today we have discovered that negotiations have been taking
place for a year - there is collective delirium about the ESM
that has led the leader of the opposition, the same one who took
part in talks on the ESM, and has not realised that he was at
the (talks) table without knowing it," Conte said.
Salvini responded by calling Conte a "liar" and saying that
the League had "always been against the ESM reform".
Plans to reform the ESM are causing turmoil within Conte's
government with Foreign Minister Luigi Di Maio saying Wednesday
that an overhaul of the eurozone's bailout fund that punishes
Italy must be averted.
"A reform of the ESM that crushes Italy is not feasible,"
5-Star Movement (M5S) leader Di Maio told Wednesday's Corriere
della Sera.
In June, when the finance ministers OK'd the reform, Giovanni
Tria was Italy's economy minister under Conte's first
government, which was backed by the 5-Star Movement (M5S) and
the League.
Since then Gualtieri of the centre-left Democratic Party (PD)
has replaced Tria after a new coalition was formed following
League leader Salvini's decision to pull the plug on the first
Conte government in August.
Conte is reportedly aiming to postpone the overhaul, sources
said earlier this week.
A reassessment of the sustainability of Italy's debt is
"already envisaged", the Bank of Italy said Wednesday on the
proposed reform of the ESM.
It said a reform of the ESM's charter "does not envisage nor
announce a mechanism for restructuring sovereign debts".
Gualtieri said Wednesday that "the reform of the ESM does not
in any way introduce the need to preventively restructure the
debt to accede to financial support".
He said "Italy has not needed, does not need, and will not
need ESM loans" since its debt "is sustainable and has a dynamic
that is under control, also thanks to the prudent fiscal policy
and supporting growth which the country is implementing.
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