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Savings are matter of national security, Italy tells EU on UniCredit-BPM bid
Savings are matter of national security, Italy tells EU on UniCredit-BPM bid
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By Giuseppe Fonte and Valentina Za Italy has responded to the European Commission's queries on the conditions it has imposed on UniCredit's MIL:UCG bid for Banco BPM MIL:BAMI by saying domestic savings are a matter of national security, sources familiar with the matter said.Brussels had asked Rome for details about the terms that Giorgia Meloni's government set in authorising UniCredit's buyout offer for smaller lender BPM. A Commission spokesperson said on Tuesday it was assessing the response received from Italy, adding that, under EU merger regulations, the bloc's executive body is entitled to rule on competition issues in mergers that have an EU-wide dimension. Italy's use of its 'golden power' legislation to shield key assets is also under EU scrutiny in a separate process called EU Pilot, which can lead to an infringement procedure. To clear the deal, the Italian government told UniCredit to halt its activities in Russia, except for payments, by early 2026, and to refrain from lowering BPM's loan-to-deposit ratio for five years.EU competition authorities objected in a letter to Italy in late May that it was unclear how an Italian lender buying a domestic rival could threaten the country's security and therefore be subject to golden power conditions. Italy has responded that more than 60% of UniCredit's capital is held by non-EU investors, the sources briefed on the contents of letters Rome exchanged with Brussels told Reuters.DOMESTIC SAVINGSWith a large public debt to refinance each year, Rome considers it important that the allocation of savings remains in domestic hands. Italy also argued that a government's duty to defend a country's financial security applies regardless of whether a merger deal potentially affecting national savings involves a foreign player or is fully domestic, the sources said.EU states have the power to set conditions or block deals to protect legitimate interests which are unrelated to competition issues. However, the Commission spokesperson said these interests had to be "compatible with the general principles and other provisions of EU law," as well as being "appropriate, proportionate and non-discriminatory." Born to fend off unwelcome offers from outside the EU bloc, golden powers were expanded during the COVID-19 pandemic to shield strategic companies as their valuations crashed. Some member states, including Italy, h...