Monitoring Desk
ISLAMABAD/ROME: Italian Prime Minister Giorgia Meloni on Thursday renewed her criticism of the eurozone bailout fund, a 500-billion-euro facility held back by Rome’s reluctance to ratify its recently-adopted reform.
According to Reuters, Giorgia has aired her concerns about the so-called European Stability Mechanism (ESM) during a meeting in Rome with fund’s top officials, Director General Pierre Gramegna and Secretary General Nicola Giammarioli.
Criticism of eurozone
According to a government statement, Meloni has reiterated that the ESM was an “anomaly” because despite having vital resources at its disposal “it had not been used for a long time.”
Meloni asked the ESM heads o to consider, together with the other backers of the fund “possible remedies” to turn it into an effective tool to support the economy of the euro area.
The ESM was created in 2012, which replaced a temporary fund established in 2010 at the height of the eurozone’s sovereign debt crisis. Five countries, Ireland, Greece, Spain, Portugal, and Cyprus, have turned to it for support.
The ESM can offer a lifeline to eurozone governments cut off from markets, or lend to recapitalise banks and provide precautionary credit. In return, it usually required austerity and financial reform programmes.
The fund was reformed with a 2021 treaty that must be ratified by all eurozone members before it can enter into force, Italy is a country that is dragging its feet over the problem.
The ESM tasks under the reformed treaty include providing the backstop to the Single Resolution Fund, which is responsible for dealing with failing banks in the context of the Banking Union.
