/ world today news/ The leader of the Italian populist movement “Five Stars” called in the Italian Parliament for Brussels to allow public funds to flow into the troubled banks in the country without affecting private investors, writes the “Financial Times”.
Luigi Di Maio, who has emerged as the main political rival of centre-left Prime Minister Matteo Renzi, said the bail-in mechanism to rescue banks internally should be avoided at all costs. Under the bail-in system, in case of bank failure, the “large deposits” are transformed into the capital of the troubled bank. This means that amounts above the legally guaranteed 100,000 euros are transformed into bank shares.
Di Maio said that bondholders – private or institutional investors – should not be brought into the bail-in mechanism, which could lead to large losses.
“Bail-in cannot be implemented at the moment. This will be the last blow to the depositors. I want to say to those who lead the negotiations that here is not just Matteo Renzi’s political future at stake, but also the economic future of the EU .”
Renzi is pushing for the most lenient application, or even circumvention, of EU rules to spare taxpayers the burden of bailing out the financial sector. The Five Star leader says any crackdown on private investors, especially small depositors in troubled banks, will cause problems as “citizens will have to pay for mistakes that are not theirs”.
But he also said institutions such as investment funds should be spared. According to him, if another decision is taken, it will cause “an even bigger problem in terms of foreign investment, and also Italian investment that will go abroad”.
The populist Five Star party, which won the mayoral elections in Rome last month, is the most popular party in Italy. She would easily win the parliamentary elections if they were held today, polls show. An Ipsos poll for Corriere della Sera at the start of the month gave Five Star 30.6% support, down from 28.9% in April, while confidence in the Democratic Party had fallen to 29.8% on 31. 1 percent earlier.
According to a Euromedia survey, 30-year-old Neapolitan Luigi Di Maio is Italy’s most popular political leader with a 30.6% approval rating, while the leader of the ruling Democratic Party, Matteo Renzi, lags behind with 27.2% approval.
Riyadh / Italy
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