Italy’s Finance Minister Blames Brexit Vote For Country’s Financial Woes
Italy’s finance minister, in an effort to repel attention away from himself, blame’s Britain’s Brexit vote for the horrible state of its country’s banks.
Italy’s finance minister Pier Carlo Padoan and the Italian government has been accused of not coming up with policies or other ideas that could have kept the country’s present banking crisis from occurring.
The problem with blaming Britain’s vote on leaving the European Union is that it occurred after the country began to experience its financial crisis.
Padoan said the instability of several banks isn’t the reason for the problems hitting the country’s financial system. He said the crisis during the past few weeks didn’t come from the country itself.
Instead, he said Italy’s situation stems from the British referendum decision and the resignation of David Cameron, which has caused a huge wave of uncertainty on markets around the world including Italy’s.
Padoan’s comments have stemmed some controversy since investors have grown increasingly concerned over the £270 billion pounds worth of bad loans currently on many Italian bank books.
However, in an effort to bring confidence back, Matteo Renzi, the country’s prime minister, wants to give banks £35 billion pounds. The problem though is that this goes against the newest rules from the EU.
According to Brussels regulations, the government financial assistance is only has a last resort to keep banks from going belly up. Shareholders and savers must take a hit first.
However, according to Padoan, letting citizens take most of the losses would be the government’s undoing. He said Germany used state aid when the financial crisis was at its highest to keep banks from falling apart.