UniCredit and Generali Are Testing Italy’s Future
Government intervention in banking consolidation smacks of bad, old politics and risks upsetting investors and European neighbors.
Italian government meddling with UniCredit’s plans for domestic banking consolidation does the country a disservice.
Photographer: Betty Laura Zapata/BloombergIt’s hard to see the Italian government’s use of special security powers to impose conditions on UniCredit SpA’s bid for Banco BPM SpA as anything other than political interference. The strategy will rattle investors and is provoking a fight with Europe for the sake of a bogus mission to prop up funding for domestic companies and public debt. Italy will be hurt more than helped by this move.
The government told UniCredit late Friday that it would use its so-called Golden Power to restrict how the bank can manage BPM if the $11 billion takeover it launched last November succeeds. The rules were designed more than a decade ago to protect strategic assets from foreign control, but were extended in recent years to cover some domestic deals.