State intervention is not required to support Italy’s banks but the government will focus on measures aimed at supporting the restructuring of the lenders, Italian Economy Minister Pier Carlo Padoan told daily il Sole 24 Ore in an interview published on Saturday.
He also said:
* A state-funded backstop for Monte dei Paschi’s bailout plan is not needed, the role of the state is solely that of guarantor in the sales of bad loans.
* New European rules on bail-in – hitting investors in a troubled bank before public money is used to prop it up – have created unexpected reactions in different countries.
* The government is examining measures that could help the banks to improve their business models – “a process that could have implications even on employment levels.”
* The government cannot, however, think of tailor-made rules just for one sector otherwise it translates into state aid.
* The violent reactions of the markets after the Brexit vote and the European stress tests on banks were “as expected.”
* When Italy’s 1.8 percent target ratio for deficit to GDP was agreed with the European Union, the economic scenario was different and the subsequent growth slowdown has to be taken into consideration.
* Italy’s next budget law will have to focus on measures aimed at increasing growth and productivity and to stimulate public and private investments. (Reuters)