Wednesday

23rd Sep 2020

Merkel rebuffs Renzi's bank plan

  • Merkel and Renzi during a meeting in Berlin, earlier this year. (Photo: Palazzo Chigi)

German chancellor Angela Merkel poured cold water on Italian prime minister Matteo Renzi’s plans to temporarily side-step EU rules on state aid in order to shore up Italy’s struggling banks.

Merkel told reporters on Wednesday (29 June) that the bloc’s recent laws offered enough leeway already.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

"We cannot renegotiate every two years the rules of the banking sector," Merkel said.

Renzi retorted that Italy wasn’t asking for a change of legislation.

“The rules have been changed once, in 2003, to allow France and Germany to exceed the 3 percent ceiling,” he said.

He said the Italian government at that time had allowed the rule change as a “favour to the countries” involved, but Italy had always respected the rules.

Rome has been talking to the European Commission on ways to support its banks, which are struggling under the weight of €360 billion in bad loans, slow economic growth and record-low interest rates.

The financial turmoil that followed Britain's vote to leave the EU only added to their trouble.

Claiming that its banks, in the current situation, pose a systemic risk to the eurozone, Rome sought permission to side step EU state-aid rules for six months.

Renzi wanted to inject up to €40 billion without forcing losses on shareholders and creditors.

But Berlin is not keen on Italy's argument that Brexit represents “exceptional circumstances”.

A €45bn headache for Italy

Italian banks stricken by massive amounts of bad loans and falling shares are becoming a financial and political problem for PM Matteo Renzi and for the EU.

MEPs warn of 'significant gaps' in budget talks

The budget committee chair said the European Parliament expects tangible improvements to the package in its talks with member states - while the German minister argued that the EU leaders' deal was difficult enough.

Top EU officials urge MEPs give quick budget-deal approval

MEPs criticised the EU deal on the budget and recovery package clinched by leaders after five days of gruelling talks, saying it is not enough "future-oriented", and cuts too deeply into EU policies, including health, innovation, defence and humanitarian aid

News in Brief

  1. Report: Roma life expectancy '10 years lower'
  2. US corona death toll passes 200,000
  3. Greece and Turkey agree to resume talks in Istanbul
  4. Seven countries found MidEast energy forum, without Turkey
  5. Four more states join EU medical strategic stockpile
  6. Malta police arrest chief of staff of ex-PM
  7. EP pushing for effective rule-of-law mechanism
  8. France opposes return EU deficit rules after corona

EU forecasts deeper recession, amid recovery funds row

The economies of France, Italy and Spain will contract more then 10-percent this year, according to the latest forecast by the EU executive, as it urges member state governments to strike a deal on the budget and recovery package.

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic Council meets Belarusian opposition leader Svetlana Tichanovskaja
  2. Nordic Council of MinistersNordic Region to invest DKK 250 million in green digitalised business sector
  3. UNESDAReducing packaging waste – a huge opportunity for circularity
  4. Nordic Council of MinistersCOVID-19 halts the 72nd Session of the Nordic Council in Iceland
  5. Nordic Council of MinistersCivil society a key player in integration
  6. UNESDANext generation Europe should be green and circular

Latest News

  1. EU countries stuck on rule of law-budget link
  2. EU states struggle to better sync Covid-19 measures
  3. EP groups drop homophobe from Sakharov prize
  4. Legal complaint filed with EU Commission over migration
  5. Coronavirus: Will a second wave divide Europe again?
  6. Coronavirus: the Swedish model was worth emulating
  7. Time to fix Europe's broken migration and asylum system
  8. Covid-19: How is Eastern Europe bracing for a second wave?

Join EUobserver

Support quality EU news

Join us