ECJ rules Italy bank bailout was legal

The EU Court of Justice ruled Tuesday that the 2012 bailout of Banca Tercas by the Fondo Interbancario di Tutela dei Depositi (FITD) did not involve the use of state funds as the EU Commission investigation had determined.

The EU Commission had ordered Italy to recoup €300 million of grants and guarantees that it claimed the government granted to the bank illegally using the FITD.

The Court of Justice found that the FITD acted independently when it rescued Banca Tercas. FITD’s mandate under Italian law is to reimburse depositors as part of Italy’s guarantee deposit system, if one of its member banks is forced to liquidate its assets. The court held that outside that mandate the FITD does not operate on any other public mandate and its measures to rescue Banca Tercas were within the rules and regulations that govern its banking association.

Italy has clashed with the EU on banking and fiscal policies, and the ruling party 5-Star said in a statement that the EU Commission should apologize and rewrite its rules on bank bailouts. In addition, Banca Popolare di Bari, which purchased Banca Tercas as part of the bailout plan, said it would consider possible legal action against the Commission.

Source: Jurist