Brussels, 29/06/2016 (Agence Europe) - The banking sector, in Italy or anywhere else, will be “protected as well as possible”, the President of the European Commission, Jean-Claude Juncker, pledged on Tuesday 28 June. The Italian banks, which have already been hit by non-performing loans, took the brunt of the turbulence following the referendum of the United Kingdom's membership of the EU. Italy's principal banking securities were in freefall earlier this week.
According to the agency Bloomberg, the Italian government is planning to inject €40 billion into the national banking system, in the form of capital or guarantees.
Jean-Claude Juncker explained that he had discussed the bank situation with the Italian Prime Minister, Matteo Renzi. We will do anything to avoid any kind of bank run; this is not a danger for Italy for the time being, but we have to make sure, given the uncomfortable global circumstances, that the banking sector in Italy and elsewhere will be protected in the best way possible.
The Italian press reports a request by the government for a six-month derogation to the rules on banking resolution, so that it can avoid a bail-in. “Banking union offers a few rules for bank recapitalisation, we cannot start again every two years”, said the German Chancellor, Angela Merkel, when asked about this possibility. Again according to Bloomberg, the German government is against the idea of Italy protecting investors from bailing in the banks. “Nobody has asked to change the rules”, Renzi responded. “In the current situation, we are looking to protect taxpayers' money”.
Approached by Bloomberg for a comment on Tuesday, the Vice-President of the Commission, Valdis Dombrovskis, said that the Commission was monitoring the situation closely and assessing what could be done. “There are various aspects as regards financial stability, as regards competition rules, and so on”, he explained.
In January of this year, Italy and the Commission agreed on a bailout for the Italian banks which would not involve public aid (see EUROPE 11477). The EU rules are based on the principle that State aid should not be authorised other than in exceptional circumstances, but it is reported that the German government is not convinced that the fallout from the British referendum constitutes exceptional circumstances, Bloomberg once again explains. (Original version in French by Elodie Lamer with Mathieu Bion and Aminata Niang)