EU to assess impact of Tercas bank ruling, not linked to other past rescues: Vestager

FAN Editor
European Competition Commissioner Margrethe Vestager talks to the media at the European Commission headquarters in Brussels
FILE PHOTO: European Competition Commissioner Margrethe Vestager talks to the media at the European Commission headquarters in Brussels, Belgium March 20, 2019. REUTERS/Yves Herman

March 20, 2019

BRUSSELS (Reuters) – EU Competition Commissioner Margrethe Vestager said on Wednesday she will assess the impact of an EU court ruling on the rescue of Italy’s Tercas bank, but insisted the case should not be linked to other past bank rescues.

In a blow to EU antitrust regulators, EU judges had ruled on Tuesday that Italy’s rescue plan for the rescue of the ailing lender five years ago was legal, overturning the Commission’s earlier decision that had forced the recouping of the financial aid to the lender.

“We will have to come back” to the case, Vestager told a news conference, but said no decision was made yet on whether Brussels will appeal the judgment.

After the dispute with Brussels over the rescue of Tercas, Italian authorities intervened to help four other small banks in 2015 and then rescued larger Banca Monte dei Paschi di Siena and two smaller lenders in 2017.

Those rescues were conducted under less favorable terms for the banks and their creditors, because of the EU’s rejection of the Tercas plan, the Italian banking association (ABI) said in a statement, urging the Commission to reimburse lenders and savers who lost money “due to the consequences of its wrong decisions”.

Vestager said on Wednesday that the Tercas ruling needed to be addressed carefully because it could impact the way the EU antitrust regulator operates, but urged to distinguish this case from other past rescues.

“When you look at the four smaller banks it was another chain of events” that led to their disposal, Vestager said.

In those rescues bondholders were forced to take losses, in line with EU competition rules that are aimed at reducing taxpayers’ costs in bank bailouts. One bondholder who lost money in the rescue of Banca Popolare dell’Etruria committed suicide.

(Reporting by Francesco Guarascio, editing by Louise Heavens)

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