Berlusconi puts Italian government in trouble over EU bailout fund - Metro US

Berlusconi puts Italian government in trouble over EU bailout fund

FILE PHOTO: Former Italian Prime Minister Silvio Berlusconi is discharged from Milan's San Raffaele hospital

ROME (Reuters) – Italian former prime minister Silvio Berlusconi said on Tuesday his Forza Italia opposition party would not back a reform of the euro zone bailout fund, a move that puts the government in difficulty ahead of a crucial parliamentary vote.

Reform of the fund, known as the European Stability Mechanism (ESM), has lacerated the ruling majority.

The 5-Star Movement – the biggest party in parliament – says it would increase the risk of a public debt restructuring. Its Democratic Party allies not only back the reform but also want Italy to use ESM funds to help its coronavirus-battered health system.

5-Star leader Vito Crimi said on Monday his party would reluctantly back the reform, but some of its lawmakers are expected to defy party orders and vote against, alongside rightist opposition parties.

“I will never vote in favour of the ESM reform,” 5-Star lawmaker Alvise Maniero told Reuters.

Berlusconi’s gambit means the government could lose the vote, which would put Prime Minister Giuseppe Conte in the awkward position of having to either ignore parliament or block the reform at EU level.

On Dec. 9, Conte will address parliament on the issue ahead of an EU summit that is due to approve the reform. The ESM helped to keep heavily indebted countries afloat in the euro zone debt crisis from 2009 onwards, and is separate from the EU’s pandemic recovery fund, due to be signed off at the summit.

Berlusconi said the reform gave too much power to euro zone governments in deciding the use of ESM funds, bypassing the European Parliament and the Commission.

“Our money could even be used against our will,” he said in a statement.

The government has a stable majority in the lower house, the Chamber of Deputies, but its majority is wafer-thin in the Senate, where many 5-Star members have defected since the last election.

Berlusconi’s hard-right allies, Matteo Salvini’s League and the nationalist Brothers of Italy, are both urging 5-Star’s dissidents to vote against the reform.

“Some in 5-Star’s ranks have a chance to become heroes in a world of chickens … now is the moment of truth,” tweeted eurosceptic League lawmaker Claudio Borghi.

(Writing by Angelo Amante, editing by Gavin Jones)

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