ROME Dec 19 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)