European pressure on Italy. Donhoe: “Ratify the Mes”
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Brussels. The president of the Eurogroup, Paschal Donohoeasked the Economy Minister, Giancarlo Giorgetti, of respect Italy’s commitment to ratify the new ESM treaty. This time with one more argument: the failure of the Silicon Valley Bank (Svb). The risk of a banking crisis is always around the corner and the reform of the Mes provides for a safety net (backstop) for the resolution fund of banks in crisis. Donohoe explained that, faced with the Svb crash, it is important to “ensure the resilience of the banking system and continue efforts to strengthen the banking union”.
While acknowledging “the sensitivity of the issue in the Italian Parliament”, Donohoe intends to continue working with Giorgetti “to make progress on ratification”. The director of the Mes, Pierre Gramegna, who is preparing for a series of visits to Rome, was more explicit. “The turbulence we see in the last few days” due to the bankruptcy of Svb “underline how important it would be to have the ESM treaty ratified by all countries”. The new one would allow for a backstop for the Single Resolution Fund and, according to Gramegna, “in these times of turmoil it is good to have the maximum possible safety nets and safeguards”. Now it’s up to Giorgia Meloni and Giorgetti to give an answer.
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