X - Financial Support

A number of member states have received direct financial assistance through balance of payments support (Hungary, Rumania, Latvia), bilateral agreements/IMF (Greece), the temporary emergency funds/IMF (Ireland, Portugal, Greece), and the permanent emergency fund (Spain and Cyprus).         
Several member states have (also) indirectly benefited through the Securities Markets Programme (SMP) created in May 2010, a bond-buying programme of the European Central Bank that was replaced in September 2012 by the Outright Monetary Transactions (OMT) programme (Greece, Ireland, Portugal, Italy, Spain).          

If relevant, describe the political, economic and legal situation leading up to the moment of the formal request of direct financial assistance.

Not relevant.

Describe the public and political debate during the negotiations on the financial assistance instruments, notably the Memorandum of Understanding (MoU) and Financial Assistance Facility Agreement, in particular in relation to the implications for (budgetary) sovereignty, constitutional law,
socio-economic fundamental rights, and the budgetary process.

Not relevant.

Status instruments   
What is the status of the financial assistance instruments in the national legal order (political agreement, international treaty, etc.)?

Not relevant.

Transposition national legal order 
Considering the status of the financial assistance instruments, what procedure does the constitution prescribe for their adoption/transposition into the national legal order?

Not relevant.

Role Parliament        
What is the actual role of Parliament with regard to the adoption/transposition  into the national legal order of the financial assistance instruments?

Not relevant.

Adjustment requirements    
Describe the relevant content of the financial assistance instruments.

 Not relevant.

What legal changes, if any, had to be made to accommodate ‘troika’ review missions, post-programme surveillance missions, etc?

Not relevant.

Case law international instruments
Have there been direct or indirect legal challenges against the financial assistance instruments before a national (constitutional) court?


Case law implementing measures          
Is there a (constitutional) court judgment on national policy measures adopted in relation to the Memoranda of Understanding?


Bond purchases ECB       
Describe the political, economic and legal situation leading up to the moment where the European Central Banks started buying government bonds on the secondary market (through the Securities Markets Programme, SMP).

Between 2011 and 2012 the ECB bought 102,8 billions of euro of Italian bonds, the largest quota among all the Eurozone members (this is understandable, given the dimension of the Italian public debt).[1]

The program started for Italy in August 2011, when the Berlusconi IV government was still in charge, and went on in 2012 with the Monti government (supported by a bi-partisan coalition with the same parliamentary composition).

Precisely in the summer of 2011, Italy became the subject of speculation because of its high debt-to-GDP ratio, as the fallout from a speculative global financial market attack caused by the general lack of confidence towards the euro area following the sovereign debt crises in other EU counties, Greece in particular. This, in turn, provoked substantial interest payments, making more difficult to achieve a budget surplus even having achieved primary surpluses. Financial market speculation increased the pressure on the Italian economy and «forced the government down the path of even harsher policies with a view to restoring the public finances, due to a dramatic hike in the interest rates on government debt».[2]

As already said in question VII.1, it is relevant to highlight that the course of action for the resignation of Silvio Berlusconi as head of the government, and its replacement with the so called Monti’s “technical” government, developed in the context of the strengthening of mechanisms for coordination and monitoring of economic policies, saw the culmination of a dramatic crisis of European stock exchanges and a strong widening of the spread between the rates on Italian and German bonds, and in particular developed with:

1) a letter by the President of the ECB Jean-Claude Trichet and his designated successor, then a member of the Executive Board of the ECB, Mario Draghi, to the President of the Italian Council of Ministers on 5 August 2011[3] ; 2) a letter of the President of the Council of Ministers to the President of the European Commission and the President of the European Council submitted at the Euro-Summit on 26 October 2011;[4] 3) a letter containing the request for clarification by the Commissioner for Economic and Monetary Affairs and European Commission Vice President Olli Rehn to the Italian Minister of Economy and Finance, Giulio Tremonti, on 4 November 2011;[5] 4) a letter containing the additional information given by the President of the Council of Ministers and the Ministry of Economy and Finance on 14 November 2011 to the Commissioner and Vice President Rehn.[6]

Conditionality bond purchases ECB 
What national policy measures have been requested by the ECB in exchange for the acquisition of government bonds on the secondary market? How have these requests been subject to debate in light of their implications for (budgetary) sovereignty, constitutional law and the budgetary process?

The aforementioned letter by the President of the ECB Jean-Claude Trichet and his designated successor, then a member of the Executive Board of the ECB, Mario Draghi, to the President of the Italian Council of Ministers of 5 August 2011, specified the measures considered as urgent to prevent the collapse of the country and the Euro.

The points listed were:

1. Significant measures to increase the growth potential («increase of competition, especially in services, improving the quality of public services and redesign of regulatory and tax systems to be better suited to support the competitiveness of enterprises and the efficiency of the labor market»).

2. Immediate and decisive measures to ensure the sustainability of public finances («Additional corrective fiscal measures are needed. We consider essential for the Italian authorities to front-load the measures adopted in the July 2011 package by at least one year. The aim should be to achieve…a balanced budget in 2013, mainly via expenditure cuts»)

2.a Further measures to fix the budget («It is possible to intervene further in the pension system, making more stringent the eligibility criteria for seniority pensions and rapidly aligning the retirement age of women in the private sector to that established for public employees»)

2.b An automatic deficit reducing clause («An automatic deficit reducing clause should be introduced stating that any slippages from deficit targets will be automatically compensated through horizontal cuts on discretionary expenditures»)

2.c Tight control on the assumption of debt, including commercial debt, and on the expenditures of regional and local authorities.

All these proposals were in various ways subject to contestation, both in the Parliament (in the process of enactment of the single reforms, but also with specific debates on the opportunity of a publication by the Government and a proper public debate in the Chambers)[7] and in the general public debate:[8] but it is important to recall that they were actually implemented in particular under the Monti government, which was born precisely as a bi-partisan emergency government with a clear pro-European approach, and therefore with no clear obstacles.

In light of all this, critical remarks on the heterodirected nature of these reforms notwithstanding, it will be probably more relevant to assess how many of these reforms, in the long run, will receive a complete implementation and/or will actually survive the replacement of the Monti government, in 2013, with new executives with a more pronounced  “political” nature.

What other information is relevant with regard to Italy and financial support?

It is interesting to note that the mentioned letter by Jean-Claude Trichet and Mario Draghi to the President of the Italian Council of Ministers of 5 August 2011 (see Question X.10) emphasized, among the other things, the «need for a strong commitment to abolish or merge some intermediate levels of administration (such as provinces)».

This reform, which implies amendments of the constitutional text, is still ongoing.[9]

But a previous intervention in this direction was attempted by the Monti government already in late 2011, and annulled by the Constitutional Court (n. 220/2013)[10] because of the illegitimate use of Decree-laws (legislative acts of a temporary nature having the force of law, adopted in «extraordinary cases of  need and urgency» by the Government, pursuant to art. 77 of the Constitution of the Italian Republic, see Question IV.2) for such a purpose.

However, if one can be tempted to read this last case as the symbol of a strong judicial opposition of the Constitutional Court against national legislative reforms prompted by the financial crisis, a comprehensive reading tells us, in fact, the opposite.[11]

It is for instance relevant to note that, in the same year of this judgment based on somewhat formal grounds, the Constitutional Court rejected in the case n. 8/2013[12] the complaint of two Regions against the provisions of a Decree-law of the State according to which the local authorities are divided into two classes based on the parameters of virtuosity therein, so that they participate in different degrees to the consolidation of public finances, stating that it is reasonable and legitimate to allow for «an evaluation of the adaptation of each local authority to the principles of rationalization of regulation».

Comparable judgments by the Corte Costituzionale upholding national reforms came also in the fields of the redefinition (and optimization) of the geographical allocation of courts and tribunals (n. 237/2013),[13] of the regional financial contributions to the so-called spending review measures (n. 205/2013),[14] or on the powers of control of the Court of Auditors on the local entities of the Italian five so called regions with special status (n. 60/2013).[15]

Moreover, and in the same vein, several judgments stroke down regional legislative measures considered as conflicting with the new national reforms: for instance the decision n. 28/2013,[16] n. 78/2013,[17] n. 138/2013,[18] n. 180/2013,[19] n. 221/2013.[20]

[1]               See the data included in the study of the Netherlands Court of Audit, available at the site

[2]               See E. Borghi, The Impact of Anti-Crisis Measures and the Social and Employment Situation: Italy, European Economic and Social Committee, available at the site

[3]               The complete text is available at or

[4]               See the text and the attached document available at the website

[5]               Available at the website; see also the attached questionnaire available at the site

[6]               Available at the website

[7]               See the plenary discussion of the Camera dei Deputati on the 29th September 2011,, soon after the letter of the ECB of 5.8.2011 was published by the main newspaper of the country, the Corriere della Sera.

[8]               See for instance the harsh critical positions of the former Minister of Economy and Finance Prof. Giulio Tremonti, in his book Uscita di Sicurezza, Rizzoli, 2012.

[9]               See the governmental report to the amendment proposal at the website


[11]              See the reflections by A. Morrone, Crisi economica e diritti. Appunti per lo stato costituzionale in Europa, in Quaderni costituzionali, n. 1/2014, 79, 81 and D. Tega, Welfare Rights in Italy, in C. Kilpatrick and B. de Witte (eds.) Social Rights in Times of Crisis in the Eurozone: The Role of Fundamental Rights’ Challenges, EUI Working Papers, Law 2014/05, p. 54-57, available at the website


[13]              See

[14]              See

[15]              See

[16]              See

[17]              See

[18]              See

[19]              See

[20]              See