Italy, EU agree tougher conditions for Monte dei Paschi bailout
CERNOBBIO, Italy, Sept 7
CERNOBBIO, Italy, Sept 7 (Reuters) - Italy and the European Commission have agreed that Banca Monte dei Paschi di Siena will have to carry out a larger-than-expected capital hike, cut costs and reduce its large government bond holdings in order to win a EU green light for state aid.
Rome has offered 4.1 billion euros of state loans to Monte Paschi, Italy's No.3 bank, in order to prop the lender, which has a weak capital position following a derivatives scandal and big Italian bond investments.
European Competition Commissioner Joaquin Almunia and Economy Minister Fabrizio Saccomanni reached a broad political agreement on Monte Paschi at a meeting on the sidelines of a business gathering in Cernobbio, on the shores of Lake Como.
Almunia told a news conference he expected the EU's executive to formally give its green light to the state aid package for Monte Paschi over the next two months, once the tougher conditions are incorporated into the bank's restructuring plan.
The bank had originally planned a capital increase of 1 billion euros. (Reporting by Francesca Landini, Editing by Lisa Jucca)
- Exclusive: Secret contract tied NSA and security industry pioneer |
- U.S. aircraft hit by gunfire in South Sudan as conflict worsens
- Four men arrested in deadly N.J. shopping mall carjacking
- With Fed out of the way, what's next on Wall Street?
- Analysis: Lost Brazil order raises threat to Boeing fighter jets