Italy Has Done Too Little on Banks’ Troubled Credits

Italy has done too little in the last three years to reduce non-performing loans weighing on its banks, the European Central Bank’s top bank supervisor told the Italian daily la Repubblica on Monday.

Daniele Nouy, who has headed the ECB’s supervisory arm since it started overseeing the eurozone’s top banks in 2014, welcomed a move by the Italian government to put aside €20 billion ($20.40 billion) to support its weak lenders, Reuters reported.

Nouy also rejected criticism that ECB adopted a softer treatment for German banks and declined to comment on a possible tie-up between Italy’s biggest retail bank Intesa Sanpaolo and insures Assicurazioni Generali.

“We do not comment on single banks ... we monitor developments very closely when they affect the banks we supervise and we keep in close contact with the other relevant authorities, where appropriate,” Nouy was quoted as saying by la Repubblica.

Meanwhile, Prime Minister Paolo Gentiloni said, Italy will respect European Union rules on public finances but take no measures that could depress its economy.

The European Commission has asked Italy to reduce its budget deficit this year, signaling Brussels wants Rome to reverse plans to overshoot previously agreed targets.

 Return of Russia to G8

Rome wants to use its leadership of the Group of Seven to bring Russia closer to the organization, which would bring economic and political benefits to Italy, Tiberio Graziani, president of the Rome-based Institute for Geopolitical Studies and Auxiliary Sciences told Sputnik Italia.

Gentiloni has said that his country wants to play a key role in improving relations with Russia, and will use its presidency of the G7 this year to that end. Italy assumed the group’s rotating presidency on January 1, and will host the next G7 summit in Taormina, Sicily, in May. 

Earlier this month, Italian Foreign Minister Angelino Alfano said that his country would like to see Russia at future summits in order to discuss cooperation on pressing political and economic issues.

“We discuss with Russia all the most delicate international crises. This is the truth. Perhaps it won’t be possible for Taormina, but in the future we should consider returning to a G8 that replaces the current G7,” Alfano told parliament on January 17.

Graziani told Sputnik Italia that Italy’s desire to return Russia to the G7 is a continuation of Rome’s long-term foreign policy.