|RT | Jun 26, 2017|
“The total resources mobilized could reach a maximum of 17 billion euros – but the immediate cost to the state is a little more than 5 billion,” said Finance Minister Pier Carlo Padoan. He assured Italians that on Monday “there will be normal operations at the teller windows.”
Italian Prime Minister Paolo Gentiloni defended the move as a vital “burden-sharing, not a bail-in,” aimed at saving “account-holders, savers, of these two banks, in favor of those who work in these banks, and in general in favor of the economy of the territory, one of our most important.”
The government made a deal with Italy’s biggest and best-capitalized retail bank, Intesa Sanpaolo, to take over the failing banks’ remaining assets, and agreed to provide further “guarantees” of up to €12 billion. In its turn, Intesa symbolically invested one euro and insisted that its own dividend policy remains intact.
“The government has utilized European rules in the best possible way,” Padoan said, as cited by AFP. “Those who criticize us should say what a better alternative would have been. I can’t see it.”
The European Central Bank pulled the plug on the two banks Friday, declaring that they were “failing or likely to fail,” following two years of supervision after it uncovered a capital hole and a spike in bad loans.
The emergency decree to liquidate the two banks – which has to be voted into law by parliament within 60 days – effectively means that they become part of Intesa, starting Monday.
The Italian finance minister reassured small account holders and “senior shareholders” that their funds would be “100 percent repaid.” However, bank employees are facing the potential risk of mass layoffs.