Banks: Dijsselbloem freezes Italy, but ECB opens to aid – ANSA.it

The Italian banks could be rehabilitated first, also using public money. Today the rules are more stringent. Jeroen Dijsselbloem, the Eurogroup President, freezes Italy struggling with the case Montepaschi, but the Vice-President of the ECB comes unprecedented opening in Rome in negotiations with the EU Commission: after Brexit need a “deep reflection” if you do not worth giving public aid. Also contrary to the principle of burden-sharing with private investors.

In a day marked by new instability in Business Square because of the banks, with MPS to new record lows, two weight names overlook the negotiations between Rome and Brussels. Dijsselbloem, always close to the German positions, reiterated that support in this period of turmoil in the markets can not be circumventing the directive on banks and the new rules of the European Directive on bailouts. “Other countries have managed to restructure their banks with public transport and Italians have not done so – he said speaking at The Hague – but now we have more stringent rules.” In the Italian case, this means that an injection of public funds, from the first test, in Montepaschi, must take place with the contribution of a conversion of the subordinated capital. Unless there is a risk of financial instability, as provides for an exception to the general principle laid down by the EU rules. A tightening that looks like a replica of the words of Prime Minister Matteo Renzi, who had thrown the ball in the European field, saying that the real issue are the derivatives of the continental banks (implicit reference to Deutsche Bank). And ‘the ECB, not by mouth Italian Mario Draghi but his deputy, to lend a hand, implicitly, to the Italian reasons. “The current situation, with declines in new shares after Brexit, deserves a deep reflection on the opportunity to overcome certain market imperfections with a little ‘of public support to improve significantly the stability of certain banking sectors.

<' p > fear of Frankfurt’s what inflicting losses on subordinated bondholders, as required by the general rule, may create instability: it is the case that would allow for derogation from the principle of ‘burden-sharing’ between the public and private intervention. Constancio “naturally” the rules must be applied, it should be considered “as a whole”, including the possible use of the derogation for reasons of financial stability. “A thought which makes inroads in international financial circles: the Economist talks about that like an Italian explosive situation which, if mishandled, “could signal the breakup of the Eurozone” triggering a domino effect. It recommends Europe to turn a blind eye: if it jumps the cap banks, Renzi is likely the referendum and at that point could return chaos policy. the negotiations between Rome and Brussels, sees “continuous” contacts but “our position will not change,” says the spokesperson for the competition Commissioner Margrethe Vestager, which monitors compliance with the rules on state aid. it remains to be seen whether the weight policy of the ECB, in addition to its technical assessments, the EU Commission will not move from its position. Much will depend on Berlin, which reproaches more or less explicitly that Rome had to move before, when they said “our banks are better than those of the other” . Angela Merkel has the spectrum of the elections next year, too soft line would favor the Eurosceptics with unpredictable consequences. But a period of internal instability in the Eurozone could pose an even more worrying prospect.