Italy works to grant Monte Paschi aid by Friday - sources
By Giuseppe Fonte | February 28, 2013 3:14 AM EST
The Italian treasury is working to meet a March 1 deadline for granting a 3.9 billion euro state bailout to Monte dei Paschi
The source dismissed a Bloomberg report that said the outgoing caretaker government led by Mario Monti was considering postponing the bailout and leaving the final decision on the payout to the next government.
A government source also dismissed the report, saying there was no political reason to delay the bailout after this week's parliamentary elections produced an inconclusive result.
A third source with knowledge of the situation said only formal procedures remained to be completed and was not aware of any particular hurdles for the aid to be granted.
Monte dei Paschi declined to comment.
Shares in the bank, Italy's third largest, fell just over 2 percent by 3.35 p.m. British time, with one Milan trader citing market rumours of a bailout delay.
Monte dei Paschi requested the bailout last year after failing to meet tougher capital requirements set by European regulators.
Under the scheme, it is due to issue 3.9 billion euros of bonds to the treasury by March 1.
However, the prospect of a prolonged stalemate after no political bloc secured enough seats to form a majority in parliament has raised questions over whether the outgoing government would succeed in granting the controversial bailout by Friday's deadline.
Adding to the confusion, consumer watchdog Codacons said on Wednesday it had appealed against a court ruling in which the government was given the green light to give the aid to Monte dei Paschi.
Codacons is seeking to block the bailout, saying it wants Monte dei Paschi nationalised.
The appeals court will decide on March 22 after rejecting a request by Codacons to suspend the bailout with immediate effect, a judicial source said.
Monte dei Paschi had to raise its request for state aid by 500 million euros last November after discovering loss-making derivatives trades carried out by the previous management which are now at the heart of a judicial probe by prosecutor in Siena.
(Reporting By Giuseppe Fonte, wiritng by Silvia Aloisi; editing by Keith Weir)
Most Popular Slideshows
- In Photos, Typhoon Rammasun Blasts the Philippines
- Typhoon Rammasun Claims 18 Lives in China, Incurs $4.32B Losses (PHOTOS)
- Ellen DeGeneres Caught Cheating with Mutual Friend Before Portia de Rossi’s Rehab – Reports [PHOTOS]
- Malaysia Airlines MH17: Vital Black Boxes Finally Land in Hands of Malaysian Authorities, Rebels Announce Ceasefire (PHOTOS/VIDEOS)
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Samsung Galaxy Note 4 Apps Leak Online, Five Fresh Features to Expect from the Android Smartphone
- Moto 360 Price Speculations, Key Features, Strategic Release Date, Design: A Watch That is More Than Just Time
- Windows Phone 8.1 Update Rollout: 20 Nokia Lumia Phones Eligible and 13 New Features to be Added
- Google Nexus 8 Release Date Soon Along with 2 More HTC Android Tablets – Reports
- Three New Moto G Successors Spotted in FCC Document Dubbed Moto G2, Moto M and More --Reports
- iPad Air 2 Release Date Will Skip IGZO Panel; To Rollout with Super-Slim iPad Mini Air
- Upcoming iPad Mini 3 Could be 30% Thinner and Likely be Called iPad Mini Air; Apple Q3 Results Show 9% Decrease in iPad Sales