Mario Draghi is attempting to sell the world’s oldest bank, which has enraged Italians.
Mario Draghi, the Prime Minister of Italy, has provoked outrage by announcing plans to sell out Monte dei Paschi.
Monte dei Paschi is an Italian bank, however it has been in financial trouble in recent years. The state had to save it from bankruptcy in 2017, and the 550-year-old lender has been in dire straits since then. The Italian government has faced popular outrage over its plans to sell the bank back to the private sector and cede state control.
The transaction has sparked outrage among the general public as well as within Mr. Draghi’s own ruling coalition.
In 2017, the Italian government had to bail out the bank with a capital injection of €5.4 billion (£4.58 billion).
Following this, the Italian Treasury became the bank’s largest shareholder, thereby turning it into a state-owned enterprise.
The European Commission approved the bailout agreement, but stipulated that Italy must leave Monte dei Paschi after five years.
The EU’s deadline, set until the end of 2021, is rapidly approaching.
Critics claim that selling the bank to the private sector will cost Italian taxpayers money.
According to analysts, the deal will benefit Unicredit, which is on the verge of acquiring Monte dei Paschi, but it will be terrible news for Italian taxpayers.
They say that taxpayers will be responsible for the costs of non-performing loans and losses that must be siphoned off to make the sale more palatable.
Many bystanders are incensed. “If you sell an asset under a deadline and there is only one interested bidder, guess who is dictating conditions?” Carla Ruocco, Chair of Italy’s parliamentary committee on the banking sector, told Politico.
Despite the criticism, Draghi’s government appears to be sticking to its initial deal with the European Commission to sell the bank’s shares.
The sale of Italy’s shares in the bank and its merger with another, according to Finance Minister Daniele Franco, is “in the common interest [of everyone].”
For years, Monte dei Paschi has been losing money.
Despite its rescue, the bank failed the European Banking Authority’s “stress test” with flying colors.
They discovered that a major economic downturn would wipe away the bank’s whole capital.
The Italian government does not appear to be prepared as the pandemic continues to cause financial problems for the rest of the world. “Brinkwire News in Condensed Form.”