Overview

• Italy remains the only euro-area country yet to ratify the 2021 reform of the European Stability Mechanism (ESM), blocking its implementation.
• At the latest Eurogroup meeting, EU leaders, including President Paschal Donohoe, emphasized the critical role of the ESM in crisis preparedness and banking stability.
• Italian Economy Minister Giancarlo Giorgetti reiterated that the Italian Parliament lacks the votes for ratification, underscoring the nation's stance on parliamentary sovereignty.
• EU Commissioner Valdis Dombrovskis and the Single Resolution Board highlighted the potential risks to financial stability if the ESM's backstop function is not activated.
• Despite diplomatic pressure, Giorgetti’s position reflects resistance from key Italian parties, including Lega and Fratelli d’Italia, which view the ESM as a threat to economic sovereignty.