What is the ESM and why Giorgia Meloni doesn't want it

MES and Giorgia Meloni
Article contents
0: 00 / 0: 00

In the Italian political panorama, a particularly sensitive issue concerns the European Stability Mechanism (ESM). This financial instrument, born in the heart ofXNUMX-XNUMX business days, presents itself as a bulwark against economic crises, but at the same time raises questions and debates in particular by the Prime Minister.

In fact, at the center of this discussion we find Giorgia Meloni, leader of the Brothers of Italy as well as Prime Minister, whose attitude of clear opposition to the ratification of the ESM turned on the spotlight and controversy.

We try to unravel the tangle of a story that intertwines economics, politics and ideology, providing a clear and detailed picture of the positions in the field.

Meloni's ideological criticisms of the ESM

Moving on to the heart of the matter, let's delve deeper into the ideological criticism by Giorgia Meloni regarding the ESM and the reason for its opposition position.

The leader of the Brothers of Italy sees potential in this mechanism limit to national sovereignty. His perception is that the ESM, while offering financial support, imposes conditions that may result invasive for the internal politics of the member states. According to Meloni, accepting the ESM means undergo decisions which may not fully reflect national interests and needs. A position that highlights a vision in which the protection of state autonomy prevails over international economic collaboration, underlining a dilemma regarding the delicate balance between political independence and economic integration European.

Meloni's criticisms of the practical aspects of the ESM

In addition to ideological concerns, Giorgia Meloni raises practical questions regarding the European Stability Mechanism. The leader of the Brothers of Italy considers the ESM as an inefficient and burdensome tool, particularly in comparison to the alternatives offered by financial market.

Meloni claims that the resources necessary to face economic crises can be better found through the markets, rather than relying on a mechanism that only comes into play in situations of serious financial difficulty.

Furthermore, Meloni criticizes the 2020 reform of the ESM, believing that it has further reduced national sovereignty and increased the risk of onerous conditions imposed on states in difficulty.

The objections to Meloni's position. Why is she wrong?

Giorgia Meloni's position on MONTH it is not without disputes. Numerous economists argue that the European Stability Mechanism is fundamental for the stability of the European Union.

Experts argue that the ESM represents a valuable tool to assist Member States in difficulty, helping them to avoid insolvency situations and to preserve the strength of the euro. A perspective that emphasizes the importance of the ESM as a safeguard against economic turbulence, in contrast to Meloni's view of it as a limiting factor for national sovereignty.

Furthermore, some experts highlight that the ESM, with its conditions, can push for necessary reforms for more financial stability in the long term, a perspective that clashes with the more market-oriented and national autonomy approach advocated by Meloni.

Why is the ESM better than the market according to economists?

Supporters of the ESM, including the Democratic Party, Italia Viva and Action, argue that the tool is necessary to guarantee the stability of the European Union as well as cheaper than the market. The ESM, in fact, can provide loans to states in economic difficulty at a subsidized rate, preventing these states from being forced into default. This, in turn, would protect the euro and the European economy as a whole.

ESM supporters also point out that the instrument was reformed in 2020, so as to make it easier for Member States to access loans. This reform, according to ESM supporters, has made the instrument more flexible and less punitive.

The reasons why economists support the ESM rather than the market

There are several reasons why a country could choose to access the ESM instead of resorting to the financial market.

More favorable economic conditions

One reason is that the ESM can offer more favorable conditions. ESM loans are subject to lower interest rates than those that member states could obtain on the market. Furthermore, ESM loans are guaranteed by all European Union member states, which means they are less risky for investors.

Faster access to liquidity

Another reason is that the ESM can offer faster access to funds. The approval process for ESM loans is faster than that of loans on the market. This may be important for Member States experiencing urgent economic difficulties.

Finally, the ESM can provide political support. Access to ESM loans can be seen as a sign of support from other European Union member states. This political support can be important for Member States facing an economic crisis.

What are the risks of the ESM according to economists?

Nonetheless, it is important to note that the ESM is not without risks. ESM loans are subject to conditions, which may include public spending cuts and structural reforms. These conditions can be controversial and can be perceived as an interference with national sovereignty.

What is the public perception and what do the surveys say about the ESM?

Giorgia Meloni's approach to European Stability Mechanism (ESM) located a significant echo in Italian public opinion. A 2023 survey reveals that a sizable percentage, the 63% of Italians, it is declared against the ratification of the ESM.

A fact that reflects a widespread feeling of skepticism and concern about a mechanism perceived as limiting national sovereignty and potentially burdensome.

Follow us on Telegram
Let's talk about: