Italy has nothing to fear from ESM reform, PM Conte says

During his speech to parliament, Conte sharply rejected criticisms by the right-wing League and Brothers of Italy parties. (File/AFP)
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Updated 11 December 2019

Italy has nothing to fear from ESM reform, PM Conte says

  • Critics of the planned changes to the European Stability Mechanism (ESM) say they would make it more likely that Italy will have to restructure its debt
  • During his speech to parliament, Conte sharply rejected criticisms by the right-wing League and Brothers of Italy parties

ROME: Italian Prime Minister Giuseppe Conte dismissed criticisms of planned reforms to the euro zone bailout fund on Wednesday, saying the proposals, which have been heavily attacked by right-wing opposition parties, posed no threat to Italy.

Critics of the planned changes to the European Stability Mechanism (ESM) say they would make it more likely that Italy will have to restructure its debt, the highest in the euro area as a proportion of national output after Greece’s.

“Italy has nothing to fear ... its debt is fully sustainable, as the main international institutions, including the (EU) Commission have said,” Conte told parliament ahead of a European Council meeting this week to discuss the reform.

He repeated that Rome would not agree to any restrictions on banks holding sovereign debt.

During his speech to parliament, Conte sharply rejected criticisms by the right-wing League and Brothers of Italy parties, saying they appeared aimed at undermining Italy’s membership of the single currency.

“Some of the positions that have emerged during the public debate have unveiled the ill-concealed hope of bringing our country out of the euro zone or even from the European Union,” Conte said.

The League and Brothers of Italy have attacked the planned reforms to the ESM, which they say will open the door for a forced restructuring of Italy’s public debt that would hit Italian banks and savers who invest in government bonds.

Some members of the anti-establishment 5 Star Movement have made similar criticisms, adding to tensions with their partner in the ruling coalition, the center-left Democratic Party.

Lawmakers from 5 Star and the Democratic Party appeared to have smoothed over their differences on Wednesday, however, agreeing to drop demands for a veto on measures that could make it easier to reach a debt restructuring accord.

In a final resolution, they scrapped calls for a veto on so-called single limb collective action clauses (CACS), that limit the ability of individual investors to delay any restructuring agreement by holding out for better terms.

Under the new system, restructuring would go ahead after a single, aggregate vote by bondholders regarding all affected bonds while the clauses currently in place require an aggregate vote as well as an individual bond-by-bond vote.

Italy has asked to clarify that the new clauses will not rule out the so-called sub-aggregation, allowing separate votes for different groups of bond issuances to protect small investors, a government official told Reuters.


Singapore confirms first case of Wuhan virus

Updated 54 min 9 sec ago

Singapore confirms first case of Wuhan virus

Singapore Thursday confirmed its first case of the new SARS-like virus which has killed 17 people in China and spread to multiple countries including the United States.
The Ministry of Health (MOH) said the patient was a 66-year-old man from Wuhan who arrived in Singapore with his family on Monday.
He was immediately isolated after arriving at a hospital with a fever and cough, and test results later confirmed he was infected with the coronavirus.
One of his traveling companions, a 37-year-old man from Wuhan, has also been admitted to hospital as a suspect case.
Prior to admission, they had stayed at a hotel on the resort island of Sentosa, the ministry said.
It added that Singapore was expecting more cases and alarms “given the high volume of international travel.”
Moreover, tourists leaving Bangkok for China said on Thursday they were worried about the spread of the Wuhan virus, ahead of more air and train travel in the lead-up to the Lunar New Year holidays.
China has placed Wuhan, a city of 11 million, on lockdown, as it is considered the epicenter of a new coronavirus outbreak that has killed 17 and infected nearly 600.
Thailand has so far confirmed four cases of coronavirus, the largest number outside China. Two of the cases were Chinese women who have since been allowed to return home. Chinese tourists make up the largest group of visitors to Thailand.
At Bangkok’s Suvarnabhumi airport, masked visitors lined up as usual to check in for Southern China Airlines flights back to China.
AirAsia said on Thursday it has canceled direct flights between Wuhan and cities in Thailand and Malaysia until Jan 28.
Matt Thomas, who lives in the Chinese city of Xian, said he was worried about the new Chinese virus, especially because he once contracted swine flu which he described as “awful.”
“I’m a bit worried that it will repeat. I have just got to be safe. In these sorts of situations, you know, take everything seriously, don’t take any risks,” Thomas said.
Chinese health officials fear the transmission rate will accelerate, as hundreds of millions of Chinese travel at home and abroad during week-long holidays for the Lunar New Year.