After 12 months frozen in a drawer,

the EU Economy and Finance ministers



given the

green light to reform the Mede,

the European Stability Mechanism.

Conceived in 2012 as a rescue instrument, the Mede had run out of tasks, underused.

That is why the States decided to give him a roll.

It did not exactly become a European IMF, nor does it take on the tasks of a Euro ministry.

It could not transform itself into a really ambitious embryo of the Euro Budget, but the pact was to give it more powers, more firepower and responsibilities for fiscal supervision.

A delicate balance that took years to forge and yet has not been able to materialize until today due to a very specific problem: Italian politics.

The text of the Mede reform (and the establishment of a firewall for the Single Resolution Fund) has been waiting since December 2019 for the waters to calm down in Rome.

There, for reasons that defy logic and go far beyond the economy, the European entity that channeled the bailouts of Greece, Spain, Portugal, Ireland or Cyprus is somewhat toxic.

They have never used it and it does not seem that they are going to do it either now, despite the fact that since spring there is up to 240,000 million euros at the disposal of all countries at a ridiculous price to deal with health (direct or indirect).

But it is untouchable.

It is difficult to convey how hot the debate is, which last year led Members of Parliament to fist each other.


For La Lega, and to a lesser extent Cinco Estrellas, it became a weapon and a bomb.

They have managed to convince millions of Italians that the country's independence and sovereignty is at stake.

That the reform is actually a ploy by Germany, France and the Netherlands to force a restructuring of the Italian debt, since it introduces the collective action clauses (CAC) that legally articulate the possibility of simpler removals at worst of the cases.

The Lega sees a "mortal danger" there.

And they threaten, as the deputy Claudio Borghi did yesterday, Minister Gualtieri with "criminal responsibilities" if he signed a reform for which, they say, he has no parliamentary or popular mandate.

Prime Minister Conte and the PD part of the coalition had no problems, but

Cinque Stelle has spent 12 months dodging the issue,

eventually agreeing without any change, after receiving assurances that it is not so bad.

Or considering that the political climate is somewhat more bearable now.

"It is a substantial step that shows the will to compromise and a success. It is very promising for the next challenges," agreed Commissioner Paolo Gentiloni, former Italian Prime Minister and well aware of how difficult it has been.

In the rest of the EU this is a technical question.

Important, but without political background.

It is approved by the Eurogroup because it is not an instrument at 27. And the process is not yet completed.

In December, the heads of state and government are expected to support what was agreed at the traditional semi-annual Euro Summit.

It would be signed in January and then comes the litmus test: the national parliamentary ratifications.

"An important step that reinforces the Banking Union and the financial stability of the euro zone", celebrated the Spanish Nadia Calviño.

"There are decisions that sound so technical that it is difficult to see their political impact at first. Today's agreement on the reform of the European Stability Mechanism (ESM) is one of those, but it strengthens the euro and the entire European banking sector.

One sector Stable banking is an important prerequisite

for growth and jobs in Europe. It is excellent and important news for our companies and for European citizens, "said

German Finance Minister Olaf Scholz.

The aim of the reform is to give the Mede more powers.

Improve the precautionary lines of credit that you can grant, assign more responsibilities in bailouts.

And it would be the Mechanism that would provide funds, through loans, for the firewall of the Single Resolution Fund (FuR), whose purse comes from the contributions of financial entities.

With this emergency safe, which could be available in two years (one earlier than expected a decade ago) the EU believes that the hedge network is strong enough for the next crisis.

"It is a tool of last resort, an additional network that complements the resolution pillars of the Banking Union and ensures that a bank failure will not harm the entire economy or create financial instability. I am happy to announce that it will be operational two years before as planned, at the beginning of 2022 ", said the president of the Eurogroup, Paschal Donohoe


the reform also includes giving it powers in fiscal supervision of the Member States.

A wish of the most orthodox countries that do not believe that the Commission has been tough enough in the past.

The Mede is controlled by the States and in the perpetual much between the community and the intergovernmental it is a point for the less 'federalist' capitals.

And it is chaired by Klaus Regling, a German hawk and a great veteran of European affairs.

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