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ESM: why Italy rejects this dangerous instrument, and why Di Maio and Conte made a mess of it



Yet another “decisive day” for the parliamentary examination of the ESM, European Stability Mechanism, reform bill has just ended, with nothing to show for it. It is so decisive that the examination has been postponed until next week, as has happened twice before since (late June) it was before the House. We thank Startmag for explaining the matter.

Meanwhile, the echo of President Giorgia Meloni’s harsh attack on Giuseppe Conte, Prime Minister at the time of the events, regarding the now famous signature affixed on January 27, 2021, to the reformed text by the plenipotentiary ambassador to the EU, Maurizio Massari, at the request of Foreign Minister Luigi Di Maio, has not subsided. It occurred, according to Meloni, “under the favor of darkness” and without a parliamentary mandate.


The previous legislature saw the signing of the Esm treaty by the government, with the signature affixed by an ambassador on the instructions of the foreign minister and the economics minister, a fact that has no consequence if parliament does not ratify the treaty, but which is most serious because those who signed did so without a parliamentary mandate.. In essence, throughout the previous legislature, the parliamentary guidelines were not fully respected either by Minister Giovanni Tria or, more importantly, by his successor Roberto Gualtieri.

In fact, there are three parliamentary resolutions (June and December 2019 and December 2020) that limit ESM reform to the banking sector only, prohibiting the government from approving reforms that also affect public debt and the ESM’s independent assessment of its soundness. Autonomous ESM intervention in a country’s public debt would be most dangerous, because it would cast doubt on its payment, and this is at the heart of Italy’s opposition.

Thus, the negotiations could not be said to be concluded until a joint agreement was reached on all issues. What was “package logic,” if not an all-inclusive agreement, in which perhaps the advantages and disadvantages of each dossier were balanced out? By definition, you package different goods so that they travel and arrive at their destination together, as if they were an inseparable whole.

Instead, yesterday we read about everything. There is some “mandolin professor” who waved the December 9, 2020 resolution, passing it off as an act by which Parliament “voted in favor of the Esm.” False. That resolution was an act of political guidance for the upcoming Eurosummit, not a piece of legislation. So a complex act, which one must read in full, not just excerpting two lines in an instrumental way. And, with reference to the Eurosummit, it certainly reads there that “it commits the government to finalize the political agreement…on the reform of the ESM.” But that is not the only commitment. There is one “to support the profound modification of the Stability Pact, the implementation of EDIS (bank deposit insurance), and the overcoming of the Esm.” Followed by a resounding assist also to the current Parliament and the Meloni government: “the progress of work on these issues on the agenda will be verified in view of the parliamentary ratification of the reform of the Esm treaty.”

Italy’s parliamentary chambers can legitimately reject approval of the ESM because all other economic dossiers have not moved forward in the direction Italy wants. The Chamber does not accept giving in on this approval, which is extremely dangerous for Italy, without the other issues being clarified. Word of the parliamentary majority of the 18th legislature, and an essential condition was placed at the time to authorize Conte to close the negotiations on the Esm. To put it bluntly, the absence of results on the other dossiers was by itself a hostile reason for that signature. The package was gone, and only the signature on the text of a reform that instead should have remained on the table until the end, along with the other issues, remained on the table. So why close a negotiation so early when the outcome of the other dossiers is not yet known?


Then we can also discuss the issue of the date on which, with the signing, the negotiations ended. Let us gloss over the fact that already on January 14, with the resignation of two ministers from Italia Viva, the government was de facto without a parliamentary majority. In any case, it really seems to us of little importance that the message was sent from Farnesina to Brussels on the 20th, when the Conte government was still formally in full power and therefore before the resignation, which was formalized on January 26. Recall that on the same day, as is now established practice, Conte sent ministers, deputy ministers, and undersecretaries a directive (an internal act not published in the Official Gazette) describing the scope of action for “the handling of current affairs.” This was a scope of action that was not governed by any rules and was interpreted with some flexibility by the acting prime minister. The one drawn by Conte was limited to ensuring administrative continuity (emergencies and management of the social and health emergencies related to the pandemic). Nothing more.

So relevant doubts arise as to whether the decision to sign the MES reform, even though it was arranged and communicated to the plenipotentiary ambassador in Brussels on January 20, was an act within that perimeter. The resignation that intervened in the meantime should have suggested, if not mandated, that Minister Di Maio communicate to Ambassador Massari that that mandate to sign came from an entity no longer endowed with the necessary power. Because what matters is the moment of signature, not the previous moment in which that decision matured.

But even if that signature had been legitimate in law, how can one fail to see the boulder of lack of political expediency? On Jan. 26, the political majority that provided a certain political direction on Dec. 9—amidst huge contrasts and distinctions, from which the crisis began—was no longer there. Respect for Parliament and prudence would have suggested refraining from acts beyond the ordinary administration and so relevant to the country.

As a matter of law, with the resignation, the power of the government is automatically restricted to the perimeter of “dealing with current business,” regardless of the agenda of appointments for the following days. According to Professor Rescigno, after the resignation, the government can “carry out those acts that are due (mandatory) and all those whose extension would result in appreciable harm to the state, while it will have to refrain, on the level of political correctness, from all those discretionary acts that can be deferred to the future government without appreciable harm.”


Some speak of “Appreciable damage” suffered by Italy for postponing the ratification of the ESM amendment. It is not clear what this damage could be, at a time when the ESM is not being applied and the Italian banking system appears solid and without need of aid. . Even before questioning legitimacy, Di Maio and the ambassador in charge should have asked themselves the question of the disappearance of the parliamentary mandate, assuming there ever was one.

Even with all the necessary distinctions between public law and civil law, if a CEO resigns on Jan. 26, he cannot close negotiations for the sale of the company the next day, even if, previously authorized by the shareholders’ meeting, he sets the appointment for Jan. 20, prior to his resignation. Stripped of such significant powers by the resignation, he clears his schedule and stops by the office to open correspondence. In the case of Conte and Di Maio, the issue was also one of political expediency, but they deliberately ignored it.

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