By Giuseppe Fonte and Valentina Za
ROME (Reuters) – The extension of the deadline to return Italy’s Monte dei Paschi (MPS) to private hands will be “sufficiently long” to ensure the bank can relaunch and attract new investors, a senior Italian Treasury official said on Tuesday.
Treasury Director General Alessandro Rivera told a parliamentary hearing that Rome would eventually offload its stake in the bank it rescued in 2017.
Italy is in talks with the European Union over the deadline for the reprivatisation of MPS.
“Keeping it in state hands indefinitely is not an option,” Rivera said, adding that failed negotiations with UniCredit had shown the EU that it is not possible currently to clinch a deal meeting the required legal and economic conditions.
Rivera did not clarify how long an extension Italy will seek. A source with knowledge of the matter has told Reuters that Rome wants to push back the deadline by years.
“We believe it’s necessary to discuss an adequate extension. With adequate I mean a sufficiently long time span to implement further measures to strengthen the bank and improve its profit outlook,” Rivera said.
After the collapse of the proposed UniCredit deal, Italy is preparing to see through some of the measures it had devised to smoothe the way for the sale. It plans to rid MPS of its residual problem loans as well as any non-ordinary legal risks, while also bolstering its capital, sources have told Reuters.
(Reporting by Giuseppe Fonte and Valentina Za; Editing by David Goodman)
