The European Commission cries foul over Italy’s use of national security rules to effectively block UniCredit’s bid for BPM.
Brussels won’t let Giorgia Meloni’s government have the last word on shaping a new banking landscape in Italy.
The European Commission warned Rome on Monday it appeared to be violating the bloc’s merger rules by citing national security — or the “golden power” — to effectively thwart UniCredit’s bid for rival Banco BPM.
In a statement describing its letter of objection to the Italian government, the European Commission complained Rome had not provided “sufficient reasoning” to impose such stringent conditions on the tie-up that it risked failing.
The warning letter from Brussels puts the EU and Italy on a collision course in a highly sensitive sector.
The Commission has an exclusive competence to rule on mergers under EU competition rules, has examined the UniCredit-BPM deal and given a thumbs up with conditions limited to curbing excessive market concentration. The Italian government says the deal poses a security risk, partly because UniCredit still has operations in Russia.
Many observers in the banking sector, however, see the security block as a smokescreen to disguise what Italy’s government really wants: a far bigger role for Monte dei Paschi di Siena (MPS.)
MPS was bailed out in 2017 but is seen as a national darling that Rome would like to bulk up into a “third pole” in the banking sector after UniCredit and Intesa Sanpaolo.