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Draghi Is Not Amused by Italian Government

Feb. 21, 2017 (EIRNS)—European Central Bank (ECB) head Mario Draghi sent a letter to the Italian government on Feb. 3, protesting, because the Italian government issued an executive order for the banks’ safety net before asking the ECB’s opinion. Don’t do it again, Draghi says, and remember that national law must be compatible with European Union Law (!). (What do you say when Draghi sneezes? "Gut Zeus’t heit!") Draghi then issues a veiled threat that the ECB could sabotage the Italian bank rescue plan.

"The ECB should be consulted before the adoption of an executive decree by the government," the letter says, and continuing that, "It is necessary that national regulations aimed at supplying government support to the credit sector fully comply with EU Law." In this way, Draghi turns upside down constitutional principles, such as those reiterated by recent rulings of the German Constitutional Court, according to which first comes the nation and after comes the EU.

Draghi insists that

"National Law cannot, by itself, transfer competencies to an EU institution such as the ECB, without an adequate foundation in the EU Law,"

referring to the fact that the Italian government decree establishes that the ECB, as regulator in the Banking Union, must play the role of the regulator in the safety-net scheme. And then comes the threat: such a proposition will be interpreted by the ECB "as a request which the ECB can accept at its discretion."

Finally, "The ECB expects to be consulted on significant implementation rules" of the government decree, which involve "areas of competence of the ECB."

This letter comes after the Italian Finance Minister had characterized as un-"transparent" the ECB decision to suddenly increase capital requirements for Monte dei Paschi bank after the government had announced a de facto nationalization.