© AP / Luca Bruno"Monte Dei Paschi di Siena" bank branch in Milan, Italy. Italy's finance minister said Tuesday, July 4, 2017, the plan to restructure the struggling bank Monte dei Paschi di Siena will provide "a credible future'' for the institution, while ensuring stability to the Italian banking sector.
In a bid to end years of struggles, the Italian government is taking control of bank Monte dei Paschi under a relaunch plan agreed by European officials that includes the disposal of a massive 28.6 billion euros ($32.5 billion) in bad loans.
In detailing the plan Wednesday, CEO Marco Morelli said that ridding the bank of the load of soured loans was "the most relevant issue" in the European Commission's approval this week of the rescue plan.
The Italian government
will inject 5.4 billion euros into the bank, giving it a 70-percent stake, as part of a total boost of 8.1 billion euros. Under the deal, the government must exit within five years.The Monte dei Paschi rescue comes just a week after the government announced plans to save two small Veneto banks where thousands of savers have lost billions of euros.
Italian Finance Minister Pier Carlo Padoan said Wednesday that the moves had "removed impediments to growth. We are putting the worst behind us."
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