Italy considers modifying golden powers, plans to retain veto authority- report 

Italy’s government is considering changes to its financial oversight rules, while maintaining its authority to veto power on banking deals, reported Bloomberg, citing people familiar with the matter. 

This development follows a recent formal warning from the European Commission (EC) to the Italian government regarding its ‘golden powers’ legislation. 

Italy’s “golden powers” enable the government to protect national interests in strategic sectors like defence and telecommunications, and these regulations have also been extended to the banking industry. 

The EC previously expressed concerns that Italy’s regulations on specific banking sector acquisitions might not align with EU law. 

This warning stems from Brussels’s initiative to deter member states from blocking mergers and consolidation within the banking sector. 

Now, Italy plans to ease some aspects of its oversight regulations, but will maintain the authority to block mergers and acquisitions within the sector. 

Out of the changes being considered by the government include restricting the laws’ geographic scope on financial matters, some of the people told the publication. 

The other possible amendments could include altering which sectors are regulated by the authorities or adjusting the criteria for application of the rules. 

The government is determined to maintain control over banking transactions, given that both banks and the public’s savings are considered issues of national security, the sources said. 

Italy’s use of its “golden power” regulations has faced heightened attention following their application to UniCredit’s bid to buy Banco BPM.  

UniCredit ultimately pulled out of the deal in July, pointing to ambiguity surrounding how these special government powers would be enforced.  

The Italian government had made its approval contingent on UniCredit meeting a number of requirements, such as ceasing its operations in Russia. 

Italy’s government could introduce changes to its golden powers either through the budget currently under parliamentary debate or through a standalone decree. 

 The Italian government now has two months to respond to the Commission’s concerns and remedy the identified issues. If no resolution is reached, the matter could be referred to the EU’s Court of Justice. 

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