Italy Again Delays Ratification of EU Bailout Fund Reform

(Bloomberg) -- Italy has once again delayed ratifying a reform of the European Stability Mechanism bailout fund, a move which is set to further stir tensions with European Union partners.

Most Read from Bloomberg

• Meta’s Threads App Draws Millions Seeking a Twitter Alternative

• Stocks Stumble as Traders Turn to Payroll Data: Markets Wrap

• Ukraine Has Caught Up With Russia’s Tank Numbers, Data Signal

• Zuckerberg’s First Tweet in 11 Years Is Playful Jibe at Musk

• NYC Air Quality Drops to Unhealthy Levels — But Canadian Fires Aren’t to Blame

The lower house of parliament approved Wednesday a government motion to postpone voting on the reform by as much as four months.

The delay is welcome news for Prime Minister Giorgia Meloni who has repeatedly said that Italy’s approval should be linked to the reform of EU fiscal rules, hinting that Rome would use the ratification as a bargaining chip.

Italy is the only EU country which has not yet approved a reform of the ESM, set up by euro area countries in 2012 after the sovereign debt crisis, to bail out countries in exchange for strict reforms. The government is under pressure from EU partners to finalize the ratification process.

While the approval process needs to be completed in parliament, whether or not to back the fund has been an issue for several governments including Mario Draghi’s. They have struggled to gather sufficient support among lawmakers to complete the ratification.

Political opposition is chiefly due to concerns that the measure would trigger harsh austerity reforms for the country. Meloni’s right-wing coalition — made up of the Brothers of Italy party, Forza Italia and the League — have strongly opposed ratification, and fear a backlash from their support base if they change tack. Meloni has said that Italy would never tap the fund under her leadership.

Most Read from Bloomberg Businessweek

• How Mobile Money Is Bringing Electricity to the World’s Poorest

• The Air Jordan Drop So Hot It Blew Up an Alleged $85 Million Ponzi Scheme

• A Pop-Up Concert Company Gives Bands a Place to Perform, and 70% of the Profit

• How a Prison Gang Inspired by Hollywood Heists Stole $23 Million

• EBT Skimmers Are Draining Millions of Dollars From the Neediest Americans

©2023 Bloomberg L.P.