The European Commission is pressuring Italy to adopt further changes to its 'golden power' legislation, according to two sources who spoke to Reuters, after an initial review failed to ease Brussels' concerns about a possible breach of EU rules in the way Rome reviews banking M&A operations.
The dispute, the outcome of which could impact cross-border consolidation in the fragmented European banking sector, emerged after UniCredit, Italy's second-largest bank, attributed its decision last year to drop a takeover bid for smaller rival Banco Bpm to government intervention.
In November, Brussels sent a formal warning to Italy, stating that the special powers used to protect strategic national interests give the government excessive leeway to review, block, or impose conditions on transactions in the financial sector.
To satisfy the EU and end the infringement procedure, Italy this year approved a law requiring the government to wait for the Union's decisions on "prudential and competition" matters before using special powers in deals involving banks and insurance companies.
BRUSSELS: EU MUST HAVE FINAL SAY
The EU believes it is not enough for Italy to simply wait for EU decisions before deciding whether to exercise 'golden power', according to sources familiar with the matter who spoke to Reuters.
Brussels is pushing to establish the principle that the government cannot impose conditions on deals authorized by the ECB and the Commission within their respective areas of competence, as in the UniCredit-Bpm case.
(Translated by Agnese Napoletti, editing by Antonella Cinelli)
