The Montepaschi-gate is shaking the Italian election campaign. The derivatives scandal surrounding Italy's fourth largest bank immediately caused a dispute among the key political forces. Pd, the party which is leading in all the opinion polls, was especially hit. In fact, the Democratic Party exercises a very strong control over the bank and the Fondazione Monte dei Pa-schi through the Municipality of Siena (always governed by the center-left).

So the political opponents easily accused Bersani's party of being responsible for the shady management of the bank in Siena. Berlusconi's party was the first to lash out, even if the Cavaliere refused to directly criticize and preferred to avoid commenting the issue. Yesterday Prime Minister Mario Monti commented the case too: «The Democratic party have had an influence in the Monte dei Paschi scandal». Actually the control which the Pd had over Mps, although it is the most conspicuous case, is not the only example of how banks and politics are mixed in Italy. Politics have an influence, even if less than in the past, on many banking institutes in the North, through the so-called Foundations (special private institutes created in 1990 to change the public nature of some banks), which are an expression of the territory and therefore of the local institutions. This is the reason why an appeal is being made to cut these unhealthy links with suitable provisions, right after the elections, regardless of who wins.

Mario Monti's government was directly attacked and accused as well, especially by the Pdl, for having helped Monte dei Paschi to save itself thanks to the so-called "Monti bonds". The center-right pointed out that the public intervention granted to the bank costs 3.9 billion euro, which is the exact same amount «paid by the Italians for new the property tax on first home-owners». Nevertheless, according to the final report on the implementation of capital plans published by the European banking authority (Eba) - following its 2011 recommendation on temporary capital buffers - Banca Monte dei Paschi di Siena is supported by the Italian government (based on a Decree-Law) in order to cover a residual shortfall of capital. According to the law, the Italian Ministry of Economy and Finance (Mef) is authorised to underwrite Mps's subordinated convertible instruments eligible for Core Tier 1 capital. The Italian authorities are in contact with the Eu Commission so as to ensure compliance of the operation with European State aid rules.

Il should be clear that the so-called Monti bonds are not to be considered "State aid", but rather an action agreed on with the European Commission and for which Monte dei Paschi will have to pay considerable interest rates (starting from 9% up to 15%).
#insightelections2013
(Traduzione di James Tierney)

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