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Bufacchi, Isabella
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3 articles of this author have been cited in the European Press Review so far.
Hope rests on ESM
The Finance ministers of the Eurozone states agreed on a treaty establishing the permanent European Stability Mechanism (ESM) late on Monday evening. The bailout fund is to succeed the temporary European Financial Stability Facility (EFSF) in July 2012 and make 500 billion euros available to indebted Eurozone countries. The ESM is a decisive step towards emerging from the crisis, the business paper Il Sole 24 Ore concludes: "The EFSF has a fundamental flaw that can only be corrected by the new ESM. The loans that are made available to debt-stricken countries place a burden on the budgets of individual countries. ... The distribution reflects the loan guarantees given. The ESM on the other hand is a financial institution endowed with capital that is collected from each of the states of the Eurozone. Moreover the statute foresees that the ESM will be able to guarantee the bonds issued by the funds itself. This formula could relieve struggling countries of the burden of the already issued EFSF bonds."
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More from the press review on the subject » EU Policy, » Fiscal Policy, » Europe
Rating agency punishes Italy
The rating agency Standard & Poor's (S&P) downgraded Italy's creditworthiness by one notch from A+/A1+ to A/A1 on Monday. The government's battered credibility is to blame, writes the business paper Il Sole 24 Ore, because it makes the country look vulnerable: "The downgrading will increase the risk of Italy's going bankrupt because the reasons given for the move convey a harsh judgement of the decline of the country's economic and political life. The latter are pivotal mainstays for the creditworthiness of a state and its ability to service its debts. And precisely these mainstays have disappeared. S&P downgraded Italy because its already feeble growth has grown even more feeble and the prospects of recovery have diminished. The backdrop for all this is a government that is unable to govern and a political class that is incapable of rising to the challenges of globalisation."
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More from the press review on the subject » Economic Policy, » Italy
Bailout fund death-blow to debtor states
The rating agency Standard & Poor's has once again lowered the credit ratings of Greece and Portugal. Greece's rating was downgraded to BB-, Portugal's to BBB-. The new EU crisis mechanism is by no means free of blame for this move which leaves Portugal just one notch above the junk status, the business paper Il Sole 24 Ore comments: "The market had expected rating agency Standard & Poor's axe to come down on Greece's and Portugal's heads just a few days after the historical turning point at the European Council on the future of the Eurozone countries. The fears of a further wave of recession for struggling EU states were confirmed yesterday. ... The new bailout ESM mechanism increases the likelihood that ailing states will go bankrupt."
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More from the press review on the subject » EU Policy, » Fiscal Policy, » Greece, » Portugal
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