March 22, 2019

Mamma Mia! Shares in Italian bank tank after government pronouncements

Shares in Italian bank Monte dei Paschi di Siena fell by more than 10 per today cent after a draft policy for the new government said it planned to keep it in public hands.

The bank, headquartered in Florence, is 68 per cent owned by the state after a bailout last year.

Under a restructuring plan agreed with the EU last year, the worlds oldest bank agreed to close branches in a bid to increase profitability.

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However, a draft policy programme for the new populist government said the government “would redefine the banks mission and goals with a view to serving” the community.

The two largest parties after Marchs elections, the anti-establishment Five Star Movement and the right wing League party, are currently thrashing out a radical coalition programme.

According to news agency Reuters the Leagues economic spokesman Claudio Borghi said:

“The state is not going to sell out of Monte dei Paschi.

“Service to the community means that all branches in various valleys which were very useful for the Tuscan economy, which had to be shut if you were purely looking at profits, must be kept open so the bank can serve people.”

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He also said the new government would look to replace the banks chief executive Marco Morelli.

Ideas being floated by the coalition partners include tax cuts, scrapping pension reform, and a universal basic income.

The pair have also talked about returning to a pre-Maastricht Europe and both have a decidedly Eurosceptic bent.

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