44 minutosPresidente of the Bundesbank warns on bailout Mon… – Economíahoy.mx

Bloomberg – 13:51 – 26/12/2016

• The governments of the European Union used nearly 2 trillion euros

the president of The Bundesbank, Jens Weidmann, he said that there should be strict conditions for the use of government funds in the rescue of the Italian bank Banca Monte dei Paschi di Siena SpA.

The government funds should be used as a “last resort,” said Weidmann in an interview with the German newspaper Bild, adding that the measures planned by the Italian government, should be applied only to banks that are healthy, “at its core”. If you are using government funds, these should be matched with public funds because of the high fiscal debt, he said.

The Italian government wants to circumvent a system that the legislators of the European Union spent years building to ensure that investors, not taxpayers, pay the bill for banks in trouble. The outlines of a bailout of Monte Paschi were announced on the 22nd of December, and while some aspects are still vague, it is clear the challenge to the attempts of the EU to cut links between banks and states.

“In principle, we have agreed on new rules,” said Weidman to the journal. “These mainly should protect the taxpayers and to pour the responsibility on the investors. Government funding is only offered as a last resource, therefore, the requirements are strict”.

The governments of the European Union used nearly 2 billion euros (2.1 billion dollars) in state aid for the rescue of the financial sector from 2008 to 2014. New rules enacted since the crisis make it difficult to much more state intervention, especially to shore up lenders viable.

Italy has rescued Monte Paschi after the crisis when the bank did not pass tests of solvency and recorded thousands of millions of euros in losses and a mountain of bad debts.

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