European Commission Authorized Italian Government to Support Banks
June 30 2016 - 11:20AM
Dow Jones News
BRUSSELS—The European Commission on Sunday authorized Italy to
use government guarantees to create a precautionary liquidity
support program for their banks, a spokeswoman for the European
Union's executive arm said, adding that the program was approved
under the bloc's "extraordinary crisis rules for state aid."
The liquidity support program includes up to €150 billion ($166
billion) in government guarantees, said an EU official.
The commission spokeswoman declined to comment on the amount of
guarantees that were authorized, but said that the budget requested
by the Italian government had been found to be proportionate. The
Italian economy ministry declined to comment.
The spokeswoman said only solvent banks would qualify for the
liquidity support program, which has been authorized until the end
of the year.
"There is no expectation that the need to use this scheme should
arise," the spokeswoman said.
The decision, which was taken on Sunday and hasn't previously
been disclosed, appears to be a first indication of governments
moving to shore up banks in the wake of market turbulence following
the Brexit referendum in the U.K.
"As this decision and other precedents demonstrate there are a
number of solutions that can be put in place in full compliance
with EU rules to address market turbulence," the spokeswoman
said.
Giovanni Legorano contributed to this article.
Write to Valentina Pop at valentina.pop@wsj.com and Gabriele
Steinhauser at gabriele.steinhauser@wsj.com
(END) Dow Jones Newswires
June 30, 2016 11:05 ET (15:05 GMT)
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