MNI: Italy Delays ESM Vote To Boost EU Fiscal Rules Bargaining

The Italian government has decided to postpone until at least next week a debate over ratification of changes to the European Stability Mechanism treaty, a source from the Ministry of Parliamentary Relations told MNI, adding that whether the vote finally goes ahead will depend on the outcome of negotiations to overhaul the European Union’s Stability and Growth Pact.

The debate and vote had been set for Thursday, but the ruling right-wing coalition has been able to use its majority to prioritise other topics and push it back, the government source told MNI.

“At the moment I can’t tell you more about next week,” said the source. Italy has been increasingly open in its intention to use the ESM as a bargaining chip in talks over Europe’s fiscal rules, though a source in the finance ministry told MNI that Prime Minister Giorgia Meloni has now acknowledged that the ratification is now inevitable this year. (See MNI: Talks Turn Tough Ahead Of Dec 8 EU Fiscal Rules Meeting)

COALITION DIFFERENCES

Within the coalition, Meloni’s Brothers of Italy has maintained a fairly neutral position on the ESM changes, though it has clearly linked their approval to Europe’s fiscal talks. Junior partners the League is split, with some parliamentarians fiercely opposed and others privately in favour, whilst the third coalition member, Forza Italia, is supportive of the changes to the ESM treaty.

Italy has become more demanding in the EU’s fiscal talks since it was disappointed by the refusal of the European Commission to grant it more flexibility in accessing EUR200 billion in funding under the NextGenerationEU programme. Rome is now pushing for defence spending tied to supporting Ukraine in its war against Russia to be excluded from debt calculations, and for a similar exemption for green and digital transition funds from NextGenEU. (See MNI: Italy Faces Tough Deadlines For NextGenEU Cash-Officials)