Italy faces uphill bid for EU bailout fund’s top job

Rome: Rome is canvassing support for Marco Buti, a top EU official, to head the bloc’s bailout fund once the incumbent managing director Klaus Regling steps down later this year, three EU officials told Politico.

Buti, a career EU official currently acting as head of cabinet to Economy Commissioner Paolo Gentiloni, ran the EU executive’s economic and financial policy arm for over a decade. He’s described as highly competent and politically savvy. Nobody doubts his qualifications, but his nationality may be a hurdle.

At issue is the future leadership of the European Stability Mechanism, created in 2012 and equipped with €500 billion in borrowing capacity to stabilize eurozone economies in dire straits. It has been used five times since its inception, by countries that were effectively frozen out of credit markets. Italy never reached that point, but it also was generally reluctant to the idea of getting any assistance due to the reform conditions attached.

Even when the ESM opened new credit lines at the onset of the pandemic, with a mix of lighter conditions, the Italian government at the time shunned the offer due to the fund’s stigma.

For this reason, Italy is one of two member states that haven’t yet ratified the ESM treaty — the other being Germany, which is awaiting the verdict of its constitutional court.

However, Rome’s opposition has softened somewhat under Prime Minister Mario Draghi. His government now wants to ratify it soon, with a decree scheduled for discussion in cabinet in the coming weeks, the finance ministry confirmed.

But the deadline to present candidates is Monday, and Rome’s efforts to secure support for its bid from other EU countries is encountering resistance as some countries question the merits of putting an Italian in charge.

The goal is to back a name by consensus at the meeting of eurozone finance ministers on May 23, and confirm it in June.

At least three other countries are thinking of presenting their own candidate: Luxembourg, the Netherlands and Portugal. But no formal candidatures have been offered yet.