MILAN – The question of these hours, after Unicredit launched the Ops on Banco Bpm and Minister Giorgetti threatened to use the special powers of the Golden Power, is it possible to apply those special powers to an Italian operation on Italy and related to the banking sector. In fact, in recent years the range of possibilities according to which the government can exercise the Golden Power has greatly increased. In practice any M&A operation must pass, right or wrong, from preventive screening by the government which assesses whether there are elements of national interest to be protected. It was the second Conte government, at the beginning of the pandemic crisis, that followed the EU recommendations and expanded the scope of the legislation, created eight years earlier to try to stop the capital inflow from sovereign funds that they had to globalization. activities and targeted assets that are beloved by the Old Department.
As the years have passed, the the danger of China, especially on the front of the 5G and cyber security technologies, now one of the main battlegrounds between East and West today. And thus neutralize the potential risks “attack” on national strategic assets by Legislative Decree of 8 April 2020 the government has extended the notification obligation not only to non-EU entities with at least a 10% stake in Italian companies, but also to those belonging to the EU and therefore, in short, also for the Italians themselves in case they get a controlling interest.
Unicredit-Bpm, because the government is divided on the third banking hub
November 25, 2024
L‘ expansion it also belonged to the potential sectors of interventionno longer just the traditional ones of Defense and Security, energy, transport and communications, but those of health, agri-food and the financial sectorincluding that one credit and insuranceHowever, when the Covid emergency was over, all legislation became ordinary law starting from January 2023, thanks to a decision made by the Draghi government in March 2022.
At a recent conference in Milan organized at the headquarters of Mediobanca Minister Urso and Undersecretary Mantovano spoke about the broad but discreet use of the legislation regarding Golden Power, while searching for a balance between the aims of protecting the country’s security in strategic sectors and the risk of not too much discouraging investments from abroad towards Italy. Mantovano then revealed the latest details of the exercise of special powers at Palazzo Chigi: in the first ten months of 2024, 661 operations were analyzed which led to 27 exercises of special powers, 25 of them with prescription and only 2 with veto. More or less the same numbers as in 2023 and if you go back over the years from where you go 83 announcements of 2019 all 342 in 2020 (+412%), to almost 500 during 2021 up to 608 in 2022 according to the latest Copasir report. Ad growth continued at a increase in cases where
So as the years went by the shield of the Golden Power has become more widespread, causing the supporters of liberal capitalism to turn up their noses. In May 2023 the shield was opened to protect employment in four factories WhirlpoolAmerican home appliance company that received Turkey Arçelik. But just in the last few days the same company, renamed Beko, announced a restructuring plan in Italy that involves the closing of two factories with the dismissal of 2000 employees. And the government has been unable to do anything so far because the provisions did not provide for the protection of employment levels, or it was not provided for in a vague way. Then, in June 2023, Palazzo Chigi mediated the agreement of the incoming shareholders Pirelli the Italians unite it Camfin is manufactured by Sinochemimposing numerous requirements aimed at preventing interference with the management of the Italian group.
So it seems certain that Unicredit, if their Ops on the BPM bank is successful, will have to notify the government of the operation but then we will have to see what the responses are. He will hardly be able to veto it since the new agglomeration will still be Italian and does not seem to be able to endanger national security. But Palazzo Chigi, as in most of the operations examined so far, could
represent provisions that could create a second banking hub behind the much less attractive Intesa Sanpaolo.
What are the key implications of Italy’s Golden Power on foreign investments in the banking sector?
Time.news Interview: The Impacts of Golden Power on the Italian Banking Sector
Interviewer (Time.news Editor): Good afternoon, and thank you for joining us today. We’re here to discuss some pressing questions around the concept of the Golden Power in Italy, particularly in the context of recent developments with Unicredit’s operations regarding Banco BPM. With us is Dr. Alessio Rossi, a leading expert in regulatory economics and mergers. Welcome, Dr. Rossi!
Dr. Alessio Rossi: Thank you for having me! It’s great to be here.
Editor: Let’s dive right in. The Golden Power has been a significant legislative tool for the Italian government, especially in the banking sector. Can you explain what prompted the expansion of this power and how it has evolved over recent years?
Dr. Rossi: Certainly! Initially established to safeguard strategic national assets from foreign takeovers, the scope of the Golden Power was notably broadened during the pandemic. Driven by EU recommendations and growing concerns over national security—especially regarding China’s influence in technology—the Italian government expanded the criteria under which it could intervene. Now, government oversight is required for any M&A transaction, not only from non-EU entities but also for EU entities, which includes Italian companies when acquiring significant stakes.
Editor: So, it’s safe to say that the stakes have been raised? How has the government been balancing the need to protect national interests while not discouraging foreign investments?
Dr. Rossi: Exactly. The challenge lies in maintaining this delicate balance. On one hand, there is a legitimate need to protect sectors deemed strategic, like banking and cybersecurity. On the other hand, too stringent regulations could deter investment. Minister Urso and Undersecretary Mantovano recently addressed this at a conference, suggesting that the aim is to be both broadly protective and discreet in their actions. The figures speak volumes—661 operations were reviewed this year alone, indicative of an active regulatory environment.
Editor: That’s a staggering number. When examining these interventions, what trends do you notice in terms of outcomes—are most of these operations receiving approval, or are they frequently divergent?
Dr. Rossi: The statistics reveal a trend towards moderation. Out of the numerous reviews, only 27 led to the exercise of special powers. Most resulted in prescriptions rather than outright vetoes. This suggests that the government is willing to negotiate and impose conditions rather than outright block foreign investments. It reflects a pragmatic approach to maintain investment flow while safeguarding strategic interests.
Editor: With the banking landscape in a state of flux, particularly with Unicredit’s bid for Banco BPM, what implications do you foresee for the future of M&A activities in Italy? Will we see more interventions?
Dr. Rossi: Given the heightened sensitivity surrounding financial stability and national security, I expect continued vigilance and scrutiny of M&A activities. The expansion of sectors under the Golden Power, including health and agri-food, indicates that the government is keen on protecting economic sectors that contribute to public welfare, not just traditional defense and energy. Hence, we likely will see both more interventions and possibly a more nuanced understanding of how to engage with international investors.
Editor: This brings us to the broader geopolitical stage—how do you think the evolving use of Golden Power reflects Italy’s strategy in the global economy?
Dr. Rossi: It signals a clear intent to assert sovereignty over national interests in an increasingly competitive global landscape. Italy is strategically positioning itself to counter external pressures, especially from nations like China. This approach not only protects Italian assets but also aims to ensure that Italy remains an attractive destination for responsible investments under the right conditions.
Editor: Dr. Rossi, this has been an enlightening discussion. Thank you for your insights on such a complex and timely issue!
Dr. Rossi: Thank you for having me! It has been a pleasure to share my thoughts.
Editor: And that’s all for today’s interview. Stay tuned for more insights from experts in various fields here at Time.news!