ROME: Italy has asked for more time to sell four small savings banks it bailed out last year, the European Commission said on Friday (29 September), saying it was open to the request. “It is wise to get ready for the idea of state aid even if that does not mean it will be necessary,” Visco told the newspaper. State aid for Italian banks is something that should be considered even if it remains a remote possibility, Bank of Italy Governor told Italian daily Il Foglio today.
“The Commission is in close and constructive contacts with the Italian authorities regarding the prolongation of the sale deadline for four Italian bridge banks,” Commission spokesman Ricardo Cardoso said in an email. “The Commission can see good reasons to accept a postponement,” he said. Troubled Italian lender Banca Monte dei Paschi di Siena has agreed with the European Central Bank a new restructuring plan based on a €5 billion capital boost and the sale of € 28 billion worth of bad loans.
Italy promised the European Commission to sell Banca Marche , Banca Etruria, CariFe and CariChieti. But there is growing concern it may have to turn to the government for support. Asked about foreign investors buying into Italian banks, Visco said the nationality of shareholders was not important but rather “their capacity to guarantee stability”. The central bank head said the constraints on Italian budgetary policy were due to the country’s high public debt and not to European rules. Independent economists say Italy will struggle to hit even the revised targets given weak domestic demand and the crisis facing the country’s debt-laden banks.
