By Giuseppe Fonte and Valentina Za
ROME (Reuters) -Italy has no plans to strengthen its “golden power” legislation to intervene in mergers and takeovers in the financial sector, Economy Minister Giancarlo Giorgetti said on Wednesday.
The golden power rules, designed at the European Union level to fend off unwanted non-EU buyers, were expanded during the COVID-19 pandemic to shield companies deemed as strategic as valuations crashed. Some countries, including Italy, have applied the legislation to the banking sector.
Giorgetti quashed speculation in the Italian media about a decree that would bolster the golden powers to give the government more say in UniCredit’s unsolicited bid for Banco BPM.
“There is no decree,” he told reporters in parliament.
UniCredit’s swoop on Banco BPM has scuppered Rome’s plan to broker a merger between BPM and state-backed Monte dei Paschi di Siena to create a competitor to UniCredit and Intesa Sanpaolo.
Giorgetti said the government was still waiting for UniCredit to disclose the full terms of its proposed takeover so Italy can conduct a review under the golden power legislation.
“We are waiting for them to notify the operation,” he said.
The golden powers mean the Italian government has a say over any decision, act or transaction involving a company owning strategic assets which results in changes in ownership, control or availability of the assets, including mergers.
In practice, though, Rome has limited scope to intervene, as EU treaties promote free movement of capital across the bloc, sources previously told Reuters.
Prime Minister Giorgia Meloni’s government could ask for guarantees on bank branches to ensure services to customers and preserve jobs.
Golden powers fall under the EU’s framework for the screening of foreign direct investments (FDI). This is aimed at countering any risks to security and public order that could spill over from the member state where the investment is taking place to the others.
The previous EU Commission had presented a proposal to revise existing regulation and ensure all member states have FDI screening mechanisms, with a set of minimum assessment criteria, including for investments made by foreign-owned EU entities.
With a new Commission in place, a new proposal needs to be formulated. EU authorities are currently reviewing the framework and Rome is keen to understand how they will eventually change, a government official said on Wednesday, asking not to be named due to the sensitivity of the matter.
(Reporting by Giuseppe Fonte, editing by Gianluca Semeraro and Jane Merriman)
