Italy Eyes Central Bank’s Profit to Cut Deficit: Repubblica

(Bloomberg) --

The Italian government may seek to use profit from the Bank of Italy as part of its bid to avoid an excessive deficit procedure from the European Union, daily la Repubblica reported.

After including 2 billion euros ($2.3 billion) in extra dividends from state lender CDP in plans presented to Brussels, the government may seek to do something similar with proceeds from the central bank, the newspaper reported.

The populist coalition is already seeking to take over nominations for top positions at the central bank, in a move seen as an attack on the institution’s independence.

Italy’s Populists Take on Central Bank With Bid to Name Leaders

Now, it may seek to use as much as another 2 billion euros from the Bank of Italy, based on the bank’s ability to pay a higher-than-expected dividend, Repubblica said.

Italy and the EU are locked in a tense standoff as the coalition led by Prime Minister Giuseppe Conte seeks to avoid EU disciplinary action over its mountain of debt.

In a written response to Brussels’ concerns, Conte last week called on the institution to revamp its budget rules and economic governance.

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