Italy

Italy is considering compensation claims against the European Commission for the strict interpretation it gave to EU banking rules, the Italian prime minister said on Friday, after a landmark EU ruling this week over a bank rescue, Reuters reported. On Tuesday the EU general court overturned Brussels’ decision to block a 2014 rescue plan of small Italian lender Tercas, prompting compensation calls from Italian banks which argued that subsequent banking rescues in Italy were more costly because of the Commission’s strict position.

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In a related story, the International New York Times reported on a Reuters story that Italy is studying changes to the country's securitisation rules in order to help banks shed so-called 'unlikely-to-pay' (UTP) loans, a document seen by Reuters showed on Tuesday. Italian banks have drastically reduced defaulted loans on their balance sheets but for the most part they are yet to tackle UTP loans, which are not yet in default but are unlikely to be repaid in full.

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Italy will renew for up to 36 months a state guarantee scheme to help banks shed bad loans, tightening rules to increase protection for some investors, a draft law decree seen by Reuters showed. The ‘GACS’ scheme allowing banks to buy a guarantee from the state on the least risky tranche in bad loan securitization sales, has proved a success in helping lenders tackle the legacy of a deep recession, Reuters reported.

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The German Finance Ministry urged Italian lenders to speed up a reduction of soured loans and make more progress in cutting risk, with the warning coming as the government in Berlin pushes for a merger of the country’s struggling banking titans. “The Italian banking sector has long been faced with various structural problems, including the high level of non-performing loans,” the ministry wrote in responses to lawmakers’ questions published by the Bundestag on Thursday.

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Italy is preparing a decree to renew and possibly modify a state guarantee scheme designed to help its banks shed a mountain of bad loans, two sources close to the matter said on Wednesday. The scheme, known by the acronym GACS, was introduced in 2016 and is set to expire on March 6, Reuters reported. The government now aims to launch a new programme and is in talks with European authorities, which must approve it. “The agreement has not yet been reached but we are quite close,” one of the sources said, asking not to be named.

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Temporary administrators of Banca Carige said they had to find a buyer by April for the Italian bank, after unveiling a 630 million euro (£540 million) capital shortfall, Reuters reported. The European Central Bank on Jan. 2 placed Italy’s 10th largest bank under special administration - its first ever such move - after the top investor in the Genoa-based lender blocked a 400 million euro cash call.

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Delta Air Lines Inc. and U.K. discounter EasyJet Plc may invest as much as 400 million euros ($452 million) total in the latest attempt to revamp struggling Italian airline Alitalia SpA, according to people familiar with an initial draft of the plan, Bloomberg News reported. Investors in a group led by rail operator Ferrovie dello Stato SpA are evaluating the financial needs of the “new Alitalia” that would emerge after the second bankruptcy process in a decade, said the people, who asked not to be named because the discussions are private.

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Italy’s Salini Impregilo has offered to invest 225 million euros ($254 million) to rescue troubled rival construction group Astaldi, the company said on Thursday. Subscribing to a reserved capital increase, the proceeds of which will help Astaldi repay debt, Salini will gain a 65 percent stake, it said in a statement, Reuters reported. Salini said the offer was conditional on Astaldi reaching an accord with its creditors as well as other long-term investors contributing to the cash call and banks agreeing to grant Astaldi credit to stabilise the group’s finances and operations.

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Italy is willing to support the creation of a “New Alitalia” in the latest attempt to help revive the struggling carrier, the prime minister’s office said in a statement on Wednesday. Alitalia was put under special administration in 2017 after workers rejected its latest rescue plan, leaving the government once again seeking a buyer to save the carrier, Reuters reported. It will be the airline’s third rescue in a decade.

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Matteo Salvini has raised the possibility of wresting control of Italy’s sizeable gold reserves away from the country’s central bank in the latest in a series of threats to the independence of the Bank of Italy by Rome’s populist coalition, the Financial Times reported. “The gold is the property of the Italian people, not of anyone else,” Mr Salvini, deputy prime minister and leader of the League party, said in comments to reporters on Monday.

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