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5-Star says Italy should use state money to save Monte Paschi
December 9, 2016 / 3:42 PM / a year ago

5-Star says Italy should use state money to save Monte Paschi

ROME (Reuters) - Italy’s anti-system 5-Star Movement (M5S) said on Friday the government should intervene to save the country’s third-largest bank, Monte dei Paschi di Siena, (BMPS.MI) and protect small savers from losses.

Monte dei Paschi asked the European Central Bank for more time to wrap up a desperately-needed rescue plan amid a government crisis, but the ECB has turned it down, a source told Reuters.

“The ECB won’t give more time to the Italian banking system,” M5S’s European parliament group said in a statement posted on founder Beppe Grillo’s blog.

“Now Monte dei Paschi can only be saved with state aid, in a way that avoids applying the bail-in to small savers, as happened a year ago,” the group continued, referring to the state rescue of four small banks under European Union rules which led to losses for many retail investors.

The group added that the rescue should be financed by raising Italy’s budget deficit.

Reporting by Isla Binnie

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