Italy reached a deal with the
European Commission late on Wednesday for a mechanism to manage
over 200 billion euros in bad loans that are weighting on the
balance sheets of Italian banks.
"An agreement has been found with the EU about a guarantee
mechanism for non-performing loans," Economy Minister Pier Carlo
Padoan said after five hours of talks with European Competition
Commissioner Margrethe Vestager.
"This completes the Italian tool box for managing bad
loans".
The mechanism will help lenders offload bad loans with the
help of guarantees given at market prices that the EU does not
consider State aid.
Rome and Brussels had been in talks about the possibility
of setting up a bad bank to put the NPLs into, but this ran into
problems due to European rules against State aid.
Vestager said she was "very satisfied" at a "very good"
agreement.
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