Italy’s Banking Policies Clash With EU Goals

Tensions are rising between Rome and Brussels over Italy’s use of its ‘golden power’ to potentially shield national banks from EU-led consolidation, spotlighting conflicting visions for the future of European finance.

Government Intervention Sparks Controversy

Last year, **Prime Minister Giorgia Meloni**’s government opposed **UniCredit**’s attempted acquisition of **BPM**, favoring a merger with **Monte dei Paschi di Siena**. In response, Rome invoked its ‘golden power’—designed to block unwanted foreign investment—imposing strict conditions on **UniCredit**’s bid. **UniCredit** contends this effectively thwarted the deal, leading to an ongoing legal dispute.

EU Concerns Over Market Fragmentation

The European Commission is reportedly preparing to caution Italy about misusing its ‘golden power’ to impede **UniCredit**’s pursuit of **BPM**. Commission officials want to consolidate Europe’s banking market and view the fragmentation of the European banking market as a threat to the continent’s competitiveness. According to a recent study by the European Central Bank, consolidation could improve efficiency and stability in the banking sector (ECB, 2021).

Tensions Surface at Banking Assembly

At the Association of Italian Banks (**ABI**) annual assembly on Thursday, these simmering tensions played out subtly between financial authorities and industry leaders. Public comments avoided direct mention of the conflict.

Industry Calls for Free Markets

Speeches alluded to the virtues of free-market capitalism. **ABI Chairman Antonio Patuelli** stressed the need to advance the European banking union by establishing “common rules for corporate governance, markets, savings and investment.”

**Patuelli** took a swipe at the Italian government’s controversial relationship with construction magnate **Francesco Gaetano Caltagirone**, adding that “competition must always be developed and safeguarded,” and insisting that banks and “non-traditional financial actors … must be subject to the same rules.”