BRUSSELS/ROME (Reuters) -The European Commission on Friday issued a formal warning to the Italian government that its so-called ‘golden powers’ over some takeover deals could breach EU law, as Brussels tries to stop member states from obstructing banking sector consolidation.
Rome’s powers are aimed at safeguarding the national interest in strategic sectors such as defence and telecommunications. Italy is one of a number of EU countries which have also applied that legislation to the banking sector.
“The Commission has raised concerns over the so-called ‘Golden Powers’ legislation, which grants the Italian government broad prerogatives to review, block or impose conditions on corporate transactions in the banking sector,” the Commission said in a statement.
Italy’s UniCredit has blamed the government’s intervention for its decision to drop a takeover bid for smaller lender Banco BPM.
On Friday, Economy Minister Giancarlo Giorgetti said that Rome would respond to the EU’s objections in the appropriate forums and draft a legislative proposal to clarify the situation and overcome the objections.
“We are convinced that this will enable us to establish a shared framework of competences,” he said in a statement.
Reuters reported in October that Italy was ready to make some changes to its golden power rules without radically altering them.
Rome’s prime concern is to maintain the principle, which has been confirmed by some Italian court rulings, that the government has the right to defend its national interest in business matters.
(Reporting by Dheeraj Kumar in Bengaluru, Sudip Kar-Gupta in Brussels, Giselda Vagnoni in Rome; Editing by Lincoln Feast and Mark Potter)
