Italy’s coalition postpones debate over European bailout fund for 4 months

ROME, June 30 (Reuters) – Italy’s governing coalition parties will suspend for four months the parliamentary debate over the ratification of a reform to a euro zone bailout fund, a lawmaker from Prime Minister Giorgia Meloni’s party said on Friday.

Italy is the only euro zone country that has not yet passed changes to the European Stability Mechanism (ESM), as its rightist government believes it would make debt restructuring more likely and consequently raise debt servicing costs.

Andrea Di Giuseppe, a lawmaker from Meloni’s Brothers of Italy party, said coalition parties had submitted a request to parliament to delay the debate “in order not to proceed with the examination for a period of four months”.

The move was announced during a debate on the issue at the lower house Chamber of Deputies, which was scheduled following pressure from some opposition parties to immediately ratify the changes.

The ESM remains operational regardless of Italy’s green light, but it cannot support the Single Resolution Fund, responsible for dealing with ailing banks, without Rome signing up to the pact.

Earlier this week Meloni told parliament it was not time for Italy to ratify the ESM, saying the issue should become part of ongoing discussions among European governments on a broader reform of the bloc’s budget rules.