The stalemate on how to mitigate the economic shock of coronavirus can be overcome. By recapitalizing the European Investment Bank by the European Stability Mechanism, with a "synergistic scheme" designed to overcome both the resistance of some States to the loans of the Mes and the fears of the "Nordics", starting from Holland, to mutualize loans to individual countries.
The idea was launched by Intesa Sanpaolo, with a proposal that aims to speed up the response time to the pandemic and overcome the knots that also bothered the Eurogroup negotiations last night. Chief executive officer Carlo Messina anticipated the main lines in an interview with Repubblica this morning: Mes gets into debt and recapitalises Bei with 100 billion, "Bei with its leverage of over six would finance 600 billion projects in Europe, about 100 billion destined to Italy for its shareholding share ".
It would be the EIB, therefore, with a "special section", to lend to individual countries, without having to create a new financial vehicle or modify the treaties, therefore with times that would risk being very long. One of the proposals - the French one, and in general the one put forward by Cottarelli / Galli / Letta - is a Credit Fund, which is financed on the market thanks to the joint guarantee of all the States of the Eurozone.
But it takes time: you need to create a financial vehicle, equip it with an operational structure, with a rating. But the vehicle is already there, it has a maximum rating (triple A), and it is precisely EIB, in whose capital Italy has 18.8%: this is the juice of the Milanese bank's proposal. "An effective response - reads a note of Understanding - to the resistance of some states (including Italy itself) to access direct Mes loans (even if there were no conditionalities) and on the other hand to the closure of other states in the towards the issuance of Eurobonds ". Because the only financing actually mutualised would be that of the Mes. But instead of being used to finance Member States, it would recapitalize a solid institution like EIB. Which it already lends to states: Italy last year had funding for 9.7 billion out of a total of 56 billion. There are technical precautions to be taken into account. Bei is an EU body of 27: the 'Bei bis' proposed by Intesa Sanpaolo would finance only 19 euro countries, and therefore the capital increase subscribed by Mes would be in type B shares, to which losses and profits linked to the operation of this 'special section' of the institute. However, it would have the same consolidated operating structures at its disposal. Having a lever, a capital solidity and a firepower able to make the difference in the European response to the pandemic, and move quickly for the emergency. With interventions that, in the proposal, would go to 20% to banks to finance households and businesses (with collateral loans, as already happens). And 80% directly to the States, at the same rate that EIB finances itself on the markets and with very long maturities, (assuming 50 years) and a large period of pre-amortization (for example 10 years).