Italy approves €900 million rescue for bank Popolare di Bari

Italy approves €900 million rescue for bank Popolare di Bari
Copyright Christian Hartmann, Pool Photo via APCHRISTIAN HARTMANN
By Euronews
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The Italian government bailed out Popolare di bari for €900 million on Sunday.


Italy allocated €900 million on Sunday to rescue the cooperative bank Popolare di Bari.

The approved funds will go to a state regional bank that will then rescue the cooperative bank, according to ANSA. The bank originates in Italy's southern region.

"This evening we will close the Popolare di Bari issue. We want to protect savers and not give anything to the bankers responsible for this crisis," Italian Prime Minister Giuseppe Conte said.

The EU put rules in place after the financial crisis to prevent bailouts, though according to Reuters, Italian minister Francesco Boccia said the state aid falls within EU rules.

But some experts have questioned how the EU is enforcing competition rules.

"It's up to the Commission to interpret the rules in a strict way...if we want to achieve our overall objective to have a competitive banking market, then we have to apply the rules as they are," said Karel Lannoo, the CEO of the Centre for European Policy Studies.

"But again, this is not only against Italy or against this case. We have seen it two weeks ago in Germany."

Lannoo was referring to the EU commission's approval of aid from two German states to bank Nord/LB and other German cases.

European parliamentarian and economist Luis Garicano commented on Twitter after the approval of funds to Nord/LB:

"The issue is that if we accept routinely the use of huge sums of public money to bail out failing banks, we create the expectation among investors that the state will step in destroying the banking union and bringing back the sovereign-bank doom loop," Garicano wrote.

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