Eurozone bailout fund serves no purpose: Italy's Meloni

ROME, Italy: Italian Prime Minister Giorgia Meloni has said the eurozone bailout fund serves no useful purpose, and has told the European Central Bank (ECB) to be more careful in how it communicates.

In a three-hour press conference at the end of the year, Meloni, leader of the hard-right Brothers of Italy party, said, "The ECB should avoid making choices that make things worse for the bloc's economy."

As expected, the ECB raised its benchmark interest rate by 50 basis points, while signaling that more hikes would follow in the coming months, triggering a sell-off in Italian government bonds.

"It would be useful if the ECB managed its communication well, because otherwise it risks generating not panic, but fluctuations in the market that frustrate the efforts made by governments," Meloni said.

She also gave no indication of whether Italy would ratify a treaty renewing the so-called European Stability Mechanism, stressing that she believed no one would ever use the eurozone's bailout fund in its current form.

Italy is the only eurozone country reluctant to adopt the reform of the European Stability Mechanism, which would allow the institution to provide a backstop to deal with failing banks during banking union.

"I fear that the fund will never be used, because the conditions are too strict and any country applying for an ESM loan would see an increase in their bond yields and a series of disadvantages," Meloni said.

Meloni, who took office in October as head of a right-wing coalition, stressed that she wanted to meet with the head of the European Stability Mechanism to discuss the possibility of using the fund for another use, instead of ratifying the reform.


https://nord.news/2022/12/31/eurozone-bailout-fund-serves-no-purpose-italys-meloni/?feed_id=3166

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