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May 07, 2020

There will be no macroeconomic adjustment programs required from States benefiting from loans from the European Stability Mechanism and the European Commission will monitor direct and indirect health expenditure financed by the Mes funds in the framework of the European budgetary policy monitoring semester. Without special missions in the capitals, without Troika, to refer to the surveillance model experimented in Greece and in the other states saved from the Eurozone.

This is indicated by a series of documents that the European Commission has sent to the Eurogroup and to the Mes ahead of tomorrow's Eurogroup meeting and in a letter from the Vice-President of the Commission Valdis Dombrovskis and the head of the Economy Paolo Gentiloni to the President of the Eurogroup Mario Centeno.

Italian debt falls in the medium term even with a pandemic deterioration
The analysis of the sustainability of the Italian debt "indicates that, despite the risks, the debt remains sustainable in the medium term, also thanks to important mitigating factors" such as the debt profile, with maturities 8-year averages, which mitigate the risks of temporary rate hikes. So "even if the debt deteriorates due to the COVID-19 crisis, the debt / GDP ratio in the baseline scenario remains on a downward path in the medium term". The EU Commission writes it.

In Eurozone all sustainable debts
The impact of the pandemic "poses risks for the financial stability of the Eurozone, but at the same time the economic situation is fundamentally solid" writes the Commission again in the assessment of suitability to the Mes called to do in view of the new credit line. In all 19 eurozone countries "public debts are sustainable, access to markets will be maintained on reasonable terms, no one is in debt or deficit procedure and for the ECB there are no solvency problems for the banking sector".