Green light for EU extension and revised commitments for Mps

BRUSSELS - The EU Commission has approved, pursuant to EU rules on state aid, a series of revised commitments presented by Italy which replace the initial commitments on the basis of which the precautionary recapitalization of the Bank was approved Monte dei Paschi di Siena.

The Commission, a note reads, assessed Italy's request and concluded that "the extension of the deadline to complete the restructuring of the bank and carry out the sale of the Italian State's stake in Mps is acceptable, and that the revised commitments adequately balance this extension ".

In July 2017 - recalls the European executive - the Commission approved the Italian plan to support a precautionary recapitalization of Mps, based on a series of commitments presented by Italy which provided for the implementation by the bank of specific measures to restore its long-term viability, minimize distortions of competition and ensure a sufficient own contribution to cover losses and restructuring costs.

These commitments were changed for the first time in September 2019. In addition, Italy was required to sell its stake in Mps by a certain date.

Some of the commitments originally undertaken were fulfilled within the established time frame: in particular, Mps reduced non-performing loans and operating costs,

Nonetheless, in July 2022, Italy requested an extension of the deadlines to meet other commitments, in this case to sell the state stake in Mps and allow the bank to carry out certain divestments and continue the restructuring through a further reduction in personnel and costs of year with respect to revenues.

To minimize the distortions of competition that could result from the extension, Italy, explains the Commission, has proposed a series of additional commitments, such as additional divestments and divestments, the closure of other branches and the maintenance of the obligation to comply with certain limitations on the methods of exercising its activities. 

The aid granted by Italy to MPS in July 2017 for Brussels therefore remains compatible with the EU rules on state aid, as the general balance of the initial decision was maintained, and therefore approved the revised commitments .