“I absolutely respect and can understand the point of view of the Italian government if it says it does not want to access” the EU’s bailout mechanism, Donohoe told the European Parliament.
“But the ratification of the treaty will allow for the increased power of the ESM to be made available to other countries, which may instead decide they want to make use of it in the future,” he added.
“I hope that this might be taken into consideration within the ongoing debate in Italy.”
Italy is the only member state not to have ratified the reform treaty amid divisions within the government.
There are concerns over the impact of the mechanism on budgetary sovereignty, as well as claims that the bailout fund should also be used to promote growth.
At the summit in Brussels on Thursday and Friday, Donohoe said “ratification of the ESM Treaty is central to our efforts, and we will continue our engagement with Italy on this matter”.
On further interest rate hikes in Europe Donohoe said Thursday that “we are all aware of the consequences of the ECB’s decisions” but that “these challenges have to be weighed against the alternative”.
“The alternative is that if inflation is not brought down in Europe, especially in the eurozone, we will find ourselves poorer,” the Eurogroup chief told the European Parliament.
“If we fail to bring inflation back to the ECB’s medium-term target, the consequences this will have on living standards in the EU will be felt in the coming years.
“So, I think measures are needed to avoid such a scenario,” he added.
Italy has strongly criticised the decision by the ECB to continue to raise interest rates in July, claiming it will lead to recession and risks being more harmful than the inflation it is aiming to bring down.
ANSA
