Italian Parliament Gives Final Approval to Bill Ratifying ESM
The Italian Parliament gave final approval to the European Stability Mechanism, the euro-region’s permanent bailout fund.
The Rome-based lower house, or Chamber of Deputies, voted 325-53 in favor of the bill ratifying the ESM. The Senate passed the bill on July 12.
The 500 billion-euro ($615 billion) fund still requires German ratification before it can take effect. It needs countries representing 90 percent of the voting weight of the 17 euro nations to give their approval. Italy represents nearly 18 percent of that measure.
Germany’s top court will take more than eight weeks to decide whether to suspend the bailout fund, leaving Europe’s anti-crisis coffers less than half full. The Federal Constitutional Court in Karlsruhe will issue a ruling on bids to halt Germany’s participation in the ESM on Sept. 12.
European leaders said last month that they may let the ESM lend directly to banks if there’s a framework for common bank supervision.
That would include an expanded role for the European Central Bank, they said. Olli Rehn, the European Union’s Economic and Monetary Affairs Commissioner, has said that the commission will present a draft law by early September to create such a single supervisor.
Even though the ESM “isn’t operational already by this July, I don’t believe there is reason to worry,” Italian Finance Minister Vittorio Grilli said yesterday in testimony before parliament. In the meantime, the European Financial Stability Facility, the area’s existing bailout program, is available, Grilli said.
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