June 10, 2020 / 1:56 PM / a month ago

Bank of Italy's Visco sees no reason for Italy not to seek ESM loan, if needed

ROME, June 10 (Reuters) - Bank of Italy Governor Ignazio Visco said on Wednesday he saw no reason for Italy not to request a loan from the European Stability Mechanism if it needs money to relaunch its COVID-19 battered economy.

“If it’s needed, I don’t see any reason not to use it,” Visco said in an interview streamed live on Bloomberg.

Visco stressed that funds from the bailout fund are “a loan, not a gift” but they would now come “without strings” - a reference to the only conditionality being that they be used for health-related spending.

Italy’s 5-Star Movement, the largest party in the ruling coalition, is opposed to using ESM, fearing it could lead to economic policy conditions and austerity measures.

Visco said for Italy the important thing is how it uses any EU funds it obtains, and that the government needs to be “pragmatic and efficient.”

Reporting by Angelo Amante and Gavin Jones

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