The decree on Carige is in the Gazzetta and therefore it becomes effective. The State provides a parachute to the Ligurian institution that has been in crisis for some time and does so through a text of 23 articles which provides for a state guarantee on the new bonds of up to 3 billion euros and the establishment of a public fund of 1,3 billion euros to cover the costs of bonds and the subscription of shares up to one billion.
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THE DECREE COPY AND PASTE
More than a "bank-saving" decree, the one passed by the Conte government risks going down in history as a "copy and paste" decree. As revealed The Sun 24 hours, who wants to know in detail the contents of the law, as well as consult the Official Gazette, might also have a look at the Legislative Decree 237/2016, better known as the “Salvabanche decree”.
The provision approved by the Lega Government - Movimento 5 Stelle is nothing more than a copy paste of the one with which the Gentiloni Government intervened on Monte dei Paschi and on the two Venetian banks in difficulty, Popolare di Vicenza and Veneto Banca. Which would not even be news - given that both measures refer to Directive 2014/59/EU on bank resolutions - but given the numerous accusations launched by the 5 Star Movement against the previous executive and above all the attempts, rather clumsy to tell the truth, by Luigi Di Maio and Matteo Salvini to bring out differences that do not exist ("They saved the banks, we save savers", said the Northern League deputy premier January 8), the word for word citation of the old decree has become yet another case. On the other hand, not even Di Maio on Tuesday had shied away from defending the provision to the hilt, once again inveighing against the newspapers and accusing them of spreading fake news on the similarities between the actions of the old executives (Renzi and Gentiloni) and that new to banks.
CARIGE: WHAT'S IN THE DECREE
The decree that came into force on January 8 provides that the State guarantees the new Banca Carige bonds up to a nominal value of 3 billion euros. The state guarantee also applies to emergency liquidity, the "Ela" loans, which should be granted to the Ligurian bank by the Bank of Italy.
The decree also establishes that the Ministry of the Economy can intervene if one is needed precautionary recapitalization, with a window up to 30 September, for a maximum amount of 1 billion.
At this juncture, the decree clarifies that the MEF is established in the estimates a Fund of 1,3 billion euros for 2019 intended to cover charges deriving from share subscription operations carried out for capital strengthening up to a maximum limit of 1 billion. The remaining 300 million will be guarantees on newly issued liabilities and on the disbursement of emergency liquidity.
Everything will first have to be examined by the EU Commission, which will have to establish that the measures approved by the Government do not correspond to "state aid". We will also need a restructuring plan to which the bank is already working.
It should be emphasized that the date written on the draft of the decree circulated on Monday 7 January was that of "November 2018", a sign that the Government had already been preparing an emergency instrument for two months to secure Carige. It is no coincidence that in November, the Ligurian bank had failed to sell a subordinated bond and had consequently received 320 million euros from the Voluntary Scheme of the Interbank Fund.
CARIGE AND NATIONALIZATION
Nationalizing Carige is not an abstract hypothesis, but a concrete possibility. At least according to the undersecretary to the presidency of the council, Giancarlo Giorgetti who, answering a question about the possible entry into the capital of the Ligurian institute by the State, stated dryly:. "Yes".
Of the same opinion too Deputy Prime Minister Di Maio: “What can I say – he explained toAdnkronos – is that we believe in nationalization, the only intervention that can be done, the only way forward for the M5S. The sovereign population takes back the banks: this is the first case in Europe in which we have taken back "a credit institution" to give loans to businesses and more subsidized mortgages to families".
In the afternoon, the Minister of Economy also intervened on the issue, John Tria: "A market solution would still be preferable", he said during the question time in the Chamber, underlining that, for now, "it is not possible to establish whether the emergency will materialize" which could require the use of the precautionary recapitalization mechanism.
The guarantee on liabilities "serves to sterilize the situation", while the precautionary recapitalization "is a tool aimed at ensuring the compliance of capital requirements even in hypothetical scenarios of particular severity, and highly unlikely, which are the adverse scenarios", he explained later the number one of the Mef. "A precautionary recapitalization involves the presentation of a restructuring plan to restore an adequate level of profitability in the long term: it is a temporary operation, and the controlling interest must be divested at the end of the restructuring period," he added.
(Last update: 17.33 pm on 9 January).
