European Council Coronavirus Response: Endangering Italy’s Permanence in the EU
What's the point of continuing together if there isn't mutual aid?
Was Europe supposed to end on March 26, 2020? The northern countries, led by Germany and Holland, closed their doors to southern Europe, Italy, and Spain – the nations most affected by the COVID-19 coronavirus – on this day as the European Council Coronavirus Response to EU proposals.
Italy Prime Minister (PM) Conte had this to say: “So, what’s the point of continuing to be together if there isn’t that mutual aid that was to be the basis of the pro-European idea?”
This unprecedented clash is happening at the worst moment for Italy and the whole of Europe. The discussion occurred as a web conference with the leaders of the European Union and was over after Conte and Spain PM Pedro Sanchez rejected the proposals contained in the draft document prepared by the EU President, Charles Michel.
Italy and Spain had deemed the EU approach as “insufficient” in regards to the use of new financial instruments. On the table was the proposal of Conte and Sanchez, together with President of France Emmanuel Macron and 6 other heads of government for an EU institution to issue a Coronabond title not commonly from the countries of the Eurozone, but from an unspecified EU institution.
The proposal was rejected by the Northern Europe front and Germany. To this proposal Chancellor of Germany Angela Merkel indicated that from the German point of view, the European Stability Mechanism (MES) is preferred as a tool designed for crises.”
The MES specifies the conditions under which it would grant a reinforced credit line to facilitate countries on the markets. The criticism of Italy and other states that have signed the letter on Coronabond is that the same “conditionality” foreseen for classical financial crises (like Greece) cannot be valid since that of the coronavirus is completely different in nature.
The MES conditionality provides for the definition of a consolidation program and close supervision of national economic and financial policies. The Eurogroup was unable to come to a general consensus, as the heads of state and government try to find a way out and then delegate the treasury ministers to define the technical aspects. The bottom line is that for now, there is no agreement because of this European Council Coronavirus Response.
In a message to some leaders in Northern Europe, Conte said, “If anyone were to think of personalized protection mechanisms, we will refuse them; Italy has the credentials for public finance.”
On the same Italian position as France and the Spanish leader Sanchez, Italy rejected the final document containing the conclusions of the European Council in which the economic measures to support the member countries that are facing the health emergency linked to the coronavirus were to be established in this European Council Coronavirus Response.
Failure of the Italian delegates in Brussels
It seems that even the Italian presences in Brussels, starting with Former Italy PM Paolo Gentiloni and David Sassoli, President of the European Parliament, have not been able to convince the partners to a less selfish attitude.
The expected solution
There is talk of a descent into the field of Mario Draghi perhaps at the head of a real government of national unity. His recipe for avoiding depression is in addition to mobilizing banks.
“We must go beyond the box – without taboos. The article by former ECB (European Central Bank) as published in the Financial Times goes far beyond a simple invitation to intervene at any cost against the epidemic,” he said.
“It urges to change ‘mentality’ and mobilize the entire financial system towards a single goal: to protect employment – jobs, not just workers’ income – and production capacity during the recession from coronavirus.”
PM Conte’s reaction
“Now we live in the certainty that Europe has turned its back on the countries, Italy and Spain in the first place, which suffers from an unprecedented pandemic. If anyone were to think about custom protection mechanisms developed in the past, then I want to say it clearly: we are not interested, because Italy doesn’t need it.”
Positive comments in support of Conte’s decision
The Italian President Mattarella
In a message of comfort and closeness addressed to the nation, President of Italy Sergio Mattarella specified: “Further common initiatives are indispensable, overcoming old patterns that are now out of the reality of the dramatic conditions in which our continent is located.
“I hope that everyone fully understands, before it is too late, the seriousness of the threat to Europe. solidarity is not only required by the values of the Union but is also in the common interest.”
Italy Minister of Foreign Affairs Luigi Di Maio responded to the comments of the Prime Minister’s strong response to EU leaders Foreign Minister, saying “Conte did well to reject the draft of the EU summit. If the EU wants to propose old instruments, we will proceed alone, we will spend what is needed.”
Giorgia Meloni, party leader of Fratelli d’Italia (Brothers of Italy), said: “The EU must decide whether to dissolve or exist. If unable to solve the problem, then it is in serious danger.”
PM Giuseppe Conte sets the line for the future
The PM dictated the way for the future by saying: “New tools are needed; it is an epochal shock. We need to react with innovative and truly adequate financial instruments to react to a war that we must fight together to win it as quickly as possible. How can we think that a symmetrical shock is adequate to such devastating impact tools developed in the past, which were built to intervene in the event of asymmetric shocks with regard[s] to financial tensions affecting individual countries?”