ITALY CRISIS: Rome bails out debt-crippled bank and begs Brussels for break from austerity
DESPERATE ministers in Rome have pleaded with Brussels for space from European Union(EU) budget rules, as the Government prepares to bailout the country’s oldest bank.
By LANA CLEMENTS
Express.co.uk
Thu, Jun 1, 2017
Italy has been given the go-ahead to side-step rules and inject billions into Monte dei Paschi to help the bank avoid a devastating collapse, without inflicting losses on ordinary savers.
Europe’s rules forbid taxpayer money being used to rescue lenders without investors also taking a hit.
But Italy has been allowed to bend the rules amid fears a hit on savers could fuel already-strong anti-Brussels sentiment among Italians.
Now Rome wants further concessions from Europe’s rules to drum up support for the government ahead of possible early elections.
Italy’s government wants to appeal to voters with costly measures that would mean breaking targets to reduce the country’s deficit.
In a letter to EU officials, economy minister Pier Carlo Padoan hinted strict austerity spending cuts risk fuelling support for anti-euro parties.
Polls show around 30 per cent of Italians would currently vote for the 5-star movement Movement which is against Brussels and this could grow ahead of a possible election.
Mr Padoan proposed to shaving its budget deficit by just 0.3 per cent of gross domestic product next year.
Official EU rules say any country spending more than it gets in through taxes and income should be looking to cut this deficit by 0.5 per cent a year until the budget is balanced.
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