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Italy moves to bail out savers hit by bank plan

Italy was working on Friday to set up a solidarity fund to help small investors hit by the rescue last month of four regional banks, following the suicide of a man whose life savings were wiped out, government sources said.

Italy moves to bail out savers hit by bank plan
Finance Minister Pier Carlo Padoan is expected to address parliament's budget committee later on Friday. Photo: Eric Piermont

Finance Minister Pier Carlo Padoan is expected to address parliament's budget committee later on Friday on the issue.

“We are studying an intervention to reduce and mitigate the burden on savers” who lost money following the rescue of the small banks, Prime Minister Matteo Renzi said on Thursday.

Italy's financial daily, Il Sole 24 Ore, said the government was thinking of creating a €100 million ($109 million) solidarity fund, with contributions from both the state and the banking sector.

The four banks – Banca delle Marche, Banca Popolare dell'Etruria e del Lazio, Cassa di Risparmio di Ferrara and Cassa di Risparmio della Provincia di Chieti – had all been put under special administration over the past two years.

A €3.6 billion ($3.83 billion) rescue plan was launched by the government last month using a newly-formed National Resolution Fund, which is fed by the country's healthy banks.

But there have still been heavy losses for some investors and the government has drawn fire for the suicide of a retired man after he lost €110,000 which he had invested in bonds issued by Banca Etruria.

Some 130,000 shareholders and junior bond holders lost money in the rescue.

Under mounting pressure from consumer associations and political opponents, Renzi said he supported a parliamentary decision to hold an inquiry into “what has happened” in the banking system over the past decade.

After the European Commission criticized the sale of “unsuitable products” to small investors, the Bank of Italy's director general Salvatore Rossi said in an interview on Friday that the bank had called in the past for the sale of subordinated bonds to ordinary savers to be banned.

The problem, he told Corriere della Sera, is that Bank of Italy does not have the “authority” to intervene in the matter.

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ROME

Salvini to hold Rome rally to boost Italian right

Italy's strongman Matteo Salvini is to hold a key rally in Rome Saturday aimed at re-launching the Italian right and making a power-grab for the capital.

Salvini to hold Rome rally to boost Italian right
League leader Matteo Salvini at the party's annual rally in Pontida in September 15. Photo: Miguel Medina/AFP
Some eight special trains and 400 coaches are ferrying in supporters from across the country for the “Italian Pride” demonstration, with the crowds also set for a speech from former prime minister Silvio Berlusconi.
   
Salvini, head of the far-right League party, pulled support from the previous populist government over the summer in a bid to spark elections he was convinced he could win to govern the eurozone's third-largest economy alone.
   
That plan failed when his former coalition partner, the anti-establishment Five Star Movement, sealed a deal with the centre-left Democratic Party to form a new government. But after suffering a blip, the League's popularity has risen again in opposition.
   
Recent polls put the anti-immigration party at between 30 to 33 percent of voter intentions, well ahead of the Five Star (M5S) and Democratic Party (PD), which have dropped slightly to between 18 and 20 percent each.
   
With the current left-leaning government seeking to change the electoral law to prevent Salvini triumphing alone at the next elections, the 46-year old hopes to unite parties on the right and centre-right under his leadership.
   
Forza Italia head Berlusconi, 83, whose party has been in a lengthy slump, appears open to just such an alliance, along with the smaller, far-right Brothers of Italy.
   
Salvini in August had refuted the idea of a tie-up with Forza Italia, saying the League “needs nothing and no-one”. Nevertheless, Salvini has a reputation for changing his mind so often on so many issues that he should come with a warning that his statements were “irreversibly reversible”, editorialist Mattia Feltri wrote this week in the Corriere della Sera newspaper.
   
Neo-fascist party CasaPound is also expected at Saturday's rally, while a small counter-protest will be held in a nearby square.
 
City needs love
 
Political analysts say Salvini has set his sights on taking Rome and hope the right-wing alliance could carry him to victory in key upcoming regional elections, potentially setting him up for a win on a national level.
   
He “is doing what he fundamentally does best: opposition on the ground. Among the people,” said the Open news website.
   
The next general election is not due until 2023, but the current governing coalition of former foes is shaky and may not last.
   
Salvini has waged war on Rome's mayor, M5S member Virginia Raggi, calling for her resignation, and will circulate a popular petition Saturday demanding she step down now, two years before her term is due to end.
   
The League head took part in a sit-in against Raggi earlier this month. He then did Facebook live videos from places he says symbolise the city's decline, from an abandoned stadium to a residential area besieged by illegal dump sites.
   
“We need a mayor capable of loving this city and cleaning it up,” he said to Raggi, telling her to go back to being a mum.
 
'Hands off Rome'
 
Raggi, 41, has come under intense fire for the city's ongoing garbage crisis and beleaguered transport services, which have existed for decades. She has blamed the problems on organised crime and corruption in previous administrations.
   
“Hands off Rome,” she tersely replied to Salvini on Twitter.
   
The League leader has found an unlikely ally in his battle against Raggi in former prime minister Matteo Renzi.
   
Beyond that, the two Matteos profess to have little in common. As Salvini rallies Saturday, Renzi will be drumming up support for his new centrist Italia Viva party at a Florence convention.
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