- “It’s a very stupid law,” Carlo Calenda, national secretary of the political party Azione, told CNBC over the weekend.
- The market reaction and the general reaction pushed Rome to tone down the plans within 24 hours.
- Antonio Tajani, the country’s foreign minister and leader of the center-right Forza Italia party, said the government is stable and the bank tax is not creating fissures within it.
Shares of European banks fell significantly in August after a surprise announcement by the Italian government about a new tax.
Stefano Montesi – Corbis | Corbis News | fake images
Italy’s shock tax on banks remains controversial, even as the government insists it can improve it.
Europe’s main bank stock index fell nearly 3% on August 8, after the Italian government announced plans to impose a 40% windfall tax on bank profits. The move caught merchants by surprise and sent shockwaves across the continent.
The market reaction and the general reaction pushed Rome to tone down the plans within 24 hours.
Nearly a month later, the government is still figuring out how to make the measure work, but analysts and policymakers remain critical.
“It’s a very stupid law,” Carlo Calenda, national secretary of the political party Azione, told CNBC over the weekend.
Calenda, Italy’s former deputy minister for economic development, warned that the policy could discourage international investors.
“It’s something that all international investors will look at and say, ‘Wow, this is very dangerous. I don’t want to make an investment here in Italy, long-term investments, knowing that the government can step in and say, ‘Okay.’ take part of your profits,” he told CNBC’s Steve Sedgwick at the European House Ambrosetti Forum.
However, the Brothers of Italy, the leading party in the ruling coalition government, is of the opinion that lenders have not passed on higher rates to savers.
The latest bank results in Europe show that Lenders throughout the region enjoy higher levels of profitability. while interest rates continue to rise.
Italy’s Economy Minister Giancarlo Giorgetti said at Ambrosetti that the bank tax “can certainly be improved… but I do not accept that it is considered an unfair tax,” according to Reuters.
Antonio Tajani, the country’s foreign minister and leader of the center-right Forza Italia party, said the government is stable and the bank tax is not creating tension.
He insisted that it is “right to ask banks for help”, but stressed that it is important to make a distinction between large and small lenders. “We need to talk to the banks to see if it’s possible to do better wording (of the law),” she told CNBC’s Sedgwick.
However, one of the largest banks in Italy is not impressed.
“This is not the right time to reduce creditworthiness,” Intesa Sanpaolo president Gian Maria Gros-Pietro told CNBC. “We believe that the communication has not been good,” he added, stating that the measure should be unique.