ROME, Dec 19 (Reuters) - Italy's cabinet will meet later on Monday to authorise an increase to the national debt to cover the cost of saving Monte dei Paschi di Siena and other ailing banks, government sources said.
Monte dei Paschi has launched a 5-billion-euro ($5.2 billion) capital increase and must raise the money by the end of the year or face being wound down. If it cannot find takers in the private sector, the government will be forced to step in.
Sources told Reuters last week that the government was ready to pump 15 billion euros -- just under one percentage point of gross domestic product -- into Monte dei Paschi and other ailing banks. Before it can do that, it needs authorisation to lift national debt levels.
Reporting by Crispian Balmer