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Europe

ECB to raise objections to Italy's windfall tax on banks

Concern revolves around possible adverse effects of the tax on Italian banks and the economy

Associated Press
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The European Central Bank (ECB) is preparing to send a letter to Italy raising objections about the government's windfall tax on banks' profits, the Corriere della Sera daily wrote on Friday.

The letter will criticize the fact Rome announced the tax last week without previously informing either the Bank of Italy or the ECB as it is supposed to do under EU rules, the newspaper wrote, without citing sources.

ITALIAN POLICE SCOUR FOREST IN SEARCH OF DUTCHMAN WHO WAS ACCUSED OF FATALLY STABBING HIS FATHER

European Central Bank

The building of the European Central Bank (ECB) is seen amid a fog before the monthly news conference following the ECB's monetary policy meeting in Frankfurt, Germany, on Dec. 15, 2022.  (REUTERS/Wolfgang Rattay)

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A spokesman for the ECB told Reuters on Friday its President Christine Lagarde has received an official request for consultation over the measure from Italy's economy minister Giancarlo Giorgetti and the ECB will publish its opinion "in due course."

According to the Corriere della Sera article, the ECB believes the tax risks weakening Italy's banks and its economy in general, concerns it will raise in the letter to be sent within "a couple of weeks" at the latest.

Recent opinions issued by the ECB regarding similar taxes on banks in Lithuania and Spain warned that they could erode lenders' resilience to economic shocks and reduce their ability to provide credit.