Italy’s Di Maio says ‘pragmatism’ needed on use of ESM: paper

Economy
© Reuters. FILE PHOTO:  News conference after bilateral talks between Italy and Russia at Villa Madama in Rome © Reuters. FILE PHOTO: News conference after bilateral talks between Italy and Russia at Villa Madama in Rome

MILAN (Reuters) – Italy must be “pragmatic” in evaluating whether to tap the European Stability Mechanism (ESM), Foreign Minister Luigi Di Maio was quoted on Saturday as saying, marking a shift in the stance of the ruling 5-Star Movement on the bailout fund.

The 5-Star has previously said Italy’s government could collapse if it turned to the ESM, an intergovernmental fund that has doled out money in the past with painful conditions attached, as advocated by the Netherlands and other wealthy northern nations for states in need.

The 5-Star Movement, along with Italian Prime Minister Giuseppe Conte, have been calling for the creation of ‘coronabonds’ that all eurozone members would underwrite to share out the huge burden of economic recovery.

In an interview with La Stampa daily published on Saturday, Di Maio said that, when it came to using European Union resources to tackle the fallout from the coronavirus pandemic all options had to be considered.

“On one side we have those who root against Italy, and I find that disconcerting. On the other there are those who see the ESM as the national panacea. That’s not true either. We must be pragmatic. This is the game of our life and it’s not over yet. Actually, it has just started.”,” Di Maio said.

He did not elaborate further.

European Union leaders agreed on Thursday to build a trillion euro emergency fund to help recover from the coronavirus pandemic but postponed any decision on divisive details until the summer.

The accord has been portrayed in Italy as a major victory, though it stopped well short of the “coronabonds” option preferred by Rome.

Italy has suffered more coronavirus deaths than anywhere else in Europe and the disaster is ravaging its already fragile economy, making it essential to find new avenues of finance to help pay for the eventual rebuilding effort.

(This story removes superfluous word ‘since’ in final paragraph)

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