Giorgia Meloni assumed full responsibility for last week’s surprise decision to impose a 40% tax on Italian banks’ extra profits, a move which unsettled investors and highlighted her government’s populist leanings on finance policy.
(Bloomberg) — Giorgia Meloni assumed full responsibility for last week’s surprise decision to impose a 40% tax on Italian banks’ extra profits, a move which unsettled investors and highlighted her government’s populist leanings on finance policy.
The prime minister not only defended but claimed as her own the controversial levy, which was fast-tracked into a wide-ranging package of measures and rammed through cabinet shortly before the summer break.
The announcement by Meloni’s deputy, Matteo Salvini, during a late evening press conference caught investors and analysts off guard and prompted accusations that her ruling coalition was damaging Italy’s credibility in the financial markets. It initially wiped out about $10 billion in market value before bank shares recovered after officials clarified that the government would limit the impact for many lenders.
“Of course I would do it again,” Meloni said in a rare joint interview published Monday with newspapers Corriere della Sera, la Repubblica and La Stampa, when asked if she would have acted differently with hindsight.
“It’s an initiative that I wanted because I think you have to send a message about the idea of a just state,” she added. “The banking system has been quick to raise interest rates on mortgages, but it has left unchanged those for savers and a distortion was created.”
Read more: ECB Still Seen Delivering One Last Hike in September, Poll Shows
Since taking power at the end of last year, Meloni has maintained a staunch pro-Ukraine line and built a relationship of trust with US President Joe Biden, helping reassure investors concerned about a right-wing administration running the euro region’s third-biggest economy.
But on some economic and social policies, some of her decisions and comments have raised questions: she and her officials have heavily criticized the European Central Bank’s decision to tighten borrowing costs, and Meloni’s far-right Brothers of Italy party is pushing through legislation to punish surrogacy performed legally abroad with jail terms.
Meloni’s interview with the three newspapers reflects her intention to reaffirm that she is the principle decision maker in her three-party coalition, which includes Salvini’s League and Forza Italia, the party still reeling from the death in June of founder Silvio Berlusconi.
Speaking from her holiday residence in the southern region of Puglia, Meloni conceded that the bank levy was fast-tracked to avoid a delay in approval until after the summer vacation.
She said that Finance Minister Giancarlo Giorgetti, who was not present at Salvini’s news conference when he announced the new tax, had been “fully involved” in the process “being the minister writing the measure.”
“In this case, I didn’t hold the meetings that I generally do, but there was a timing issue,” Meloni said, adding that “otherwise it would have slipped to September.”
“I don’t want to punish banks, but there was a situation of imbalance,” she added. “With the ECB’s consistent and prolonged increase in interest rates, households and businesses risk being penalized.”
(Updates with context and background, starting in first paragraph)
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