Banks, faced with double the EU – Il Sole 24 Ore

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This article was published on Dec. 24, 2015 at 9:47.
The last change is the 24 December 2015 at 09:48.

BRUSSELS – The history of Italian banks continue to cause tensions between Rome and Brussels. While the controversy over the recent and controversial restructuring of four regional banks remains topical, the European Commission published last night waiting decision on the rescue of the bank Tercas. According to the EU executive, the government on that occasion he used public money, in violation of the rules on state aid.

“Following a thorough analysis, the European Commission has concluded that the support offered by the Fund interbank deposit protection (FITD) to Tercas constitute state aid incompatible with the facts and circumstances available, “it said in a statement released late yesterday afternoon, when exchanges are closed. In July 2014, the Italian authorities approved the use of FITD to save Tercas and facilitate the acquisition of Banca Popolare di Bari.

The deal, worth 300 million Euros, suspicious of the Community institutions, which opened an investigation last February (see Il Sole 24 Ore of 28 February). According to data collected by the Commission, the FITD intervened mandated by the government. In addition, the operation, says Brussels, “it was not in line with the rules on state aid because Italy did not submit a restructuring plan and that the measures do not help neither downplayed nor the resulting distortions of competition.”

Brussels considers that a country can use its deposit insurance fund to rescue a financial institution, but if the operation is set by the government member banks fund intervention is equated with State aid . Only if the measure is voluntary, this can be considered a market operation. In this sense, also yesterday, the Competition Commissioner Margrethe Vestager pointed to welcome “welcome” the choice of banks to assess their intentional action.

A bank can be saved by public money, but what triggers a resolution of the bank to be restored. This did not happen for Tercas. Moreover, the bailout weighed on the shareholders, but not on the subordinated creditors, as would the European standards. The case of the Institute of Abruzzo is not unlike that of Banca delle Marche, Banca Popolare Etruria and Lazio, Cassa di Risparmio di Ferrara and Savings Bank of the Province of Chieti.

Even in the story of these four banks rescued in late November has raised the issue of possible surretizi state aid. In various letters and letters sent to the Italian government (including that of 19 November published below), the European Commission stressed that the use of FITD – is helping a bank in crisis to repay bondholders at a loss – is believed to help State, unless fully voluntary on the part of member banks (see Il Sole 24 Ore of 15 December).

In a letter of 16 November, Brussels explained to the Italian authorities the three possible solutions in the rescue of the four banks in crisis: the solution with private money, without restrictions; the solution with the FITD – whether voluntary, and therefore no constraints, or imposed by the government and therefore treated as State aid with resolution of the bank; and finally the solution with public money or fund resolution (as happened in practice), such as to take also the resolution of the bank.

If the Commission, on the basis of European rules and precedents in recent cases, Spanish and Polish, equates the use of the Interbank Deposit Protection Fund to an exit from the public is to prevent a country to circumvent the Community rules on state aid. If the latter is also exist in the single market to ensure equal treatment. Originally they were intended to protect especially the most indebted countries, than those with greater room for maneuver in public finances.

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