Italian Prime Minister Matteo Renzi has been scrambling to find a solution to clean up his country’s banking system for months.
The Italian government has repeatedly met with European Union Commissioner for Competition Margrethe Vestager to negotiate the terms of possible government bailouts. But now Mr. Renzi has placed the struggle over government support on hold, switching gears to an approach that relies on private instead of government funding.
According to European negotiators, Mr. Renzi suddenly wants to try to find solutions without public funds. For instance, the severely battered major bank Banca Monte dei Paschi is to receive a capital injection of €5 billion ($5.54 billion), with the help of private investors, provided someone can be found who is willing to give the troubled bank more money.