EU's Juncker sees 'no risk' of major Italian bank crisis

AFP - [email protected]
EU's Juncker sees 'no risk' of major Italian bank crisis
Jean-Claude Juncker has said there is no major risk of an Italian banking crisis and stated that EU relationships with Italy were strong. Photo: Frederick Florin/AFP

European Commission head Jean-Claude Juncker said on Wednesday he sees no risk of a major Italian banking crisis, amid fears the lenders are saddled with a mountain of bad debt and need bailing out.


"I do not see the risk of a major banking crisis" in Italy, Juncker told a press conference when asked about EU relations with Italy which have been strained by several issues, including Rome's efforts to help its troubled banks.

Juncker did not elaborate on his remark about the banks and insisted that while words may have been exchanged with the Italian government, he "loved" the country and all it stood for.
"There is no problem between the government and the Commission; there is a debate, with some strong words but there are good working relations," he said.
Italian Prime Minister Matteo Renzi has been at odds with Brussels for several months - firstly over the migrant crisis and efforts to ease the burden on Italy which has borne, along with Greece, the brunt of the refugee arrivals.
Renzi has also been pushing for the Commission to cut him some slack to allow him to breach strict EU fiscal rules so that he can spend money on stimulating a weak economy.
That line of thinking has pitted Renzi against Germany, the 28-nation bloc's economic powerhouse, which insists the fiscal rules must be scrupulously observed to avoid any repeat of the 2008 financial crash.
The pressure has mounted on Rome as global stock markets have tumbled and on Tuesday, the Italian banks were once again in the firing line, posting large losses.
The downturn was made worse by fresh data showing non-performing loans hitting record highs, a clear signal that the Italian economy - struggling to recover from a three-year recession - faces another battering.
News that the European Central Bank was asking several banks -- including Banca Monte dei Paschi di Siena, Banco Popolare and UniCredit - for data on their bad loans fuelled concerns the situation was spiralling out of control.
Italian Finance Minister Pier Carlo Padoan insisted there was "no specific concern regarding Italian banks" and the ECB was merely carrying out "a study to identify best practices in the management of non-performing loans."
On Wednesday, the Italian stock market fell again, in line with its European peers.


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