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Italy on COLLISION COURSE with EU: Renzi 'set to pump billions into troubled banks'

Economy:
Italy on COLLISION COURSE with EU: Renzi 'set to pump billions into troubled banks'

ITALIAN prime minister Matteo Renzi is set to defy European Union bureaucrats by pumping billions of pounds into his country's ailing banks.

Policymakers in Rome want to inject cash into the troubled firms, in the event that confidence in Italy's financial sector drops to dangerously lower levels, according to reports.
In the wake of Britain's vote to leave the European Union, investors rushed to dump stocks in Italy's banks amid worries for their stability.
The firms are sitting on around & pound; 270billion of bad loans, and it's feared this liability in the face of a struggling eurozone economy could tip the banks over the edge.
The Italian leader is determined to put extra cash into banks to restore faith, according to the Financial Times, even though such a move is against EU rules.

Last week German leader Angela Merkel and EU heads ruled out allowing Italy to breach the regulations.
Italy's stock market has failed to recover after being hit with Britain's vote to leave.
Michael Hewson, chief market analyst at CMC Markets UK, said: "Under current EU state aid rules any attempts to help banks must involve a bail-in process that does not involve using taxpayer's money.
" Italian Prime Minister Matteo Renzi has tried to argue that the Brexit uncertainty has destabilised Italy's already fragile banks.
"The reality is the problems of Italy's banks predate last week's Brexit vote, and he knows it."

Mr Renzi has admitted Italy should have fixed its banks' problems four or five years ago under previous governments, when EU rules on state aid were less rigid, but it failed to do so.
However, he has now denied suggestions that he is trying to break the EU rules.

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04 July 2016, 17:39