ROME, Sept 5 Italy does not plan to ask to use
the euro zone's bailout fund for its struggling banks,
government sources said on Monday, denying a newspaper report.
La Stampa newspaper reported on Monday, citing three sources
with knowledge of the matter, that Prime Minister Matteo Renzi
was considering trying to tap the European Stability Mechanism
(ESM) to help Banca Monte dei Paschi di Siena.
Sources at Renzi's office said the government "totally
denied press speculation published today on the use of ESM funds
in Italy. There is absolutely no basis for these reports."
La Stampa said tapping the ESM could be the government's
"Plan B" if a bid to prop up Monte dei Paschi through a cash
call for up to 5 billion euros ($5.6 billion) and the sale of
bad loans, were to fail.
($1 = 0.8944 euros)
(Reporting by Isla Binnie; editing by Crispian Balmer)