Italy remains the sole holdout against ratifying the European Stability Mechanism (ESM) overhaul, despite fresh calls from the EU’s Single Resolution Board (SRB) for unanimous approval of the post-crisis banking reform.
During Monday’s Eurogroup meeting, officials framed the stalled treaty as critical to safeguarding Europe’s financial stability, with Eurogroup President Paschal Donohoe warning that delays leave the bloc “exposed to greater risks” in future banking collapses.
Italy’s coalition government, led by Prime Minister Giorgia Meloni, has repeatedly dismissed the ESM reforms as “outdated” and punitive. Deputy PM Matteo Salvini doubled down on Tuesday, branding the mechanism a “noose around our necks” that imposes “obsolete austerity dogma.”
Meanwhile, former Prime Minister Giuseppe Conte announced on X that the Chamber of Deputies would ask “President Meloni” some “important questions” on Wednesday.
This afternoon in the Chamber of Deputies to ask President Meloni some questions on issues we consider important. Live at 4:50 PM.
However, Meloni has hinted that Italy’s resistance could serve as a bargaining chip. In January, she suggested the impasse might force Brussels to negotiate a “modernised, flexible safety net” better suited to Rome’s debt-laden economy.
The ESM reform, agreed in 2021, aims to strengthen the EU’s ability to manage banking crises by streamlining bailout rules and enhancing the €500 billion fund’s role as a lender of last resort. Critics argue it disproportionately burdens high-debt nations like Italy, which holds €2.9 trillion in public debt, roughly 140% of GDP.
While the European Commission lacks legal tools to compel ratification, Donohoe acknowledged Italy’s “political challenges” but stressed that “inaction is not cost-free.”
