- Eurozone COLLAPSE Fears as Italy Demands £17BILLION Bailout to Prop Up Its ‘Doomed’ Bank
by LANA CLEMENTS, http://www.express.co.uk/
ITALY is preparing to pump billions of pounds into its crisis-hit banks amid rising fears of a financial crisis that could destroy the eurozone.
Rome asked for parliamentary approval to borrow €20billion (£16.8bn) to prop up troubled lenders, including Monte dei Paschi di Siena (MPS). Italy’s oldest bank is running out of time to find a solution to its €40bn (£33bn) book of bad loans. If MPS doesn’t find more cash by the end of the year, it will be wound down by the European Central Bank (ECB), which could spark a crisis of confidence in the country’s financial sector.
The lender is now pushing ahead with a desperate attempt to raise around £4.2billion (€5bn) of private cash, as part of a plan to stay afloat and protect its retail investors. But the plan is expected to fail, meaning Rome will have to step in.
Italy’s Economy minister said the money it was seeking could be used to keep the banking system afloat. He said: “These resources could also be used as part of a programme to boost capital at banks.”
Under European Union rules, any bailout by the Government must be accompanied by losses for Italian savers and pensioners with bonds in the bank. The move is set to be politically explosive the week-old administration of Prime Minister Paolo Gentiloni.