23/02/2009 (Agence Europe) - On Monday 23 February, the European Commission approved amendments to the Italian recapitalisation scheme. The changes essentially give banks another option for remunerating bonds. The Commission says the scheme provides in particular for an adequate remuneration of the state intervention and appropriate incentives for an early exit of the aid scheme. The scheme approved by the Commission on 23 December 2008 enables Italy to subscribe subordinated debt instruments, qualifying as bank core tier 1 capital. Only fundamentally sound banks are eligible for such recapitalisation. The main modification to the previous scheme is the introduction of an alternative remuneration option with a higher initial coupon and a higher annual level of the coupon until 2014 in exchange of a lower reimbursement price fixed at the nominal value until June 2013. In addition, the possibility for the state to take part in recapitalisations if there is a participation of at least 30 % of private investors and on equal terms with the latter has been introduced. Adequate reporting obligations to the Commission are embedded in the scheme to ensure proper monitoring of the measures. (C.D./transl.rt)