European Commission calls on Italy to comply with EU banking regulations

BRUSSELS, Nov 21 (KUNA) -- The European Commission announced on Friday that it has opened an infringement procedure against Italy by sending a formal letter of notice, due to Italy's failure to comply with the Single Supervisory Mechanism regulations. In a statement, the Commission said that its concerns focus on what is known as the "golden powers" legislation, which grants the Italian government wide authority to review, block, or impose conditions on commercial transactions in the banking sector.
The Commission explained that although these powers aim to safeguard national security and public order, their current application "may allow for unjustified interventions on economic grounds," which undermines the principles of freedom of establishment and the free movement of capital within the EU single market.
It added that the Italian legislation also overlaps with the exclusive competences of the European Central Bank under the Single Supervisory Mechanism.
The Commission confirmed that it has sent a formal notice to Rome, which must respond within two months to address the shortcomings identified. In the absence of a satisfactory response, the Commission may proceed to issue a reasoned opinion as part of the infringement procedure.
This move comes after the Italian government imposed special conditions on a takeover bid submitted by UniCredit for its smaller rival Banco BPM, a bid that was later withdrawn. The conditions included a commitment not to reduce the volume of loans granted to Italian households and businesses for five years, in addition to UniCredit's withdrawal from its operations in Russia.
UniCredit had announced last July that it was withdrawing its offer to acquire Italy's third-largest bank, attributing the decision to "restrictions imposed by Rome." (end) arn.hm