UniCredit-Mps: Negotiations are one step away from a split

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Cessation of negotiations between Unicredit and Mps. The Italian government and UniCredit are in fact preparing to cancel negotiations over the acquisition of Sienese Bank after efforts to reach an agreement on the recapitalization plan failed.

All unresolved contracts

This is what Reuters wrote on its website, while Unicredit and the Treasury Department do not comment. According to reports from the agency citing two different sources, Rome decided that it would not be able to meet Unicredit’s requests for a recapitalization package of more than 7 billion euros as this would make the agreement “extremely punitive” for taxpayers. The impossibility of reaching an agreement on the basis of the terms laid down in July was also affected.

Disputes over the size of job cuts in the world’s oldest bank, as well as over the calculation of liabilities Monte dei Paschi Bank, is another obstacle that cannot always be overcome according to these sources.

Draghi no comment

Next Wednesday is the date UniCredit asks for a framework agreement and to clarify the future, which should be with or without MPS. In short, the bank wants to act fast. It is clear that the greatest interest is on the part of the government, which is working at the same time on the new budget law. When asked yesterday in Brussels about the MPS issue, specifically by answering the question of whether the deal will arrive by the end of the month, Draghi made it clear that he is far from the match. “I can’t answer because I don’t know,” the prime minister said.

To apply for an extension in Brussels

The potential failure of negotiations makes it difficult for the Draghi government to comply with commitments made with the EU Commission to privatize the bank by mid-2022, which means Rome will have to negotiate a green light from Brussels to pump more of the public. Transfer money to MPs to plug a €2.5 billion capital shortfall and get more time for privatization.