Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
The Italian government has affirmed its intent to defend its “golden powers” legislation, which allows it to protect strategic national assets, amidst preparations by the European Commission to launch legal proceedings against Rome. Economy Minister Giancarlo Giorgetti stated on Friday that national security falls under the exclusive responsibility of the national government, indicating Italy’s readiness to challenge Brussels’ impending action.
EU Challenge and Italy’s Stance
The European Commission is reportedly set to initiate a dual-track legal challenge against Italy, targeting both its single market and merger rules. This move is part of a broader push to address instances where EU countries are perceived to be hindering bank consolidation across Europe.
Minister Giorgetti, speaking to reporters in Luxembourg following a meeting of European finance ministers, reiterated the government’s position. “National security is the exclusive responsibility of the national government, and we intend to defend it in some way,” he said, signaling a potential legal battle should the EU proceed.
Background to the Dispute
The Commission’s action is primarily prompted by Italy’s intervention in a proposed bank merger earlier this year. UniCredit, Italy’s second-largest lender, withdrew its offer for smaller rival Banco BPM on July 22, attributing the decision to government interference.
Among the conditions imposed by the Italian government for the deal to proceed, UniCredit was reportedly told to cease its operations in Russia by early 2026. This measure was intended to prevent savings collected by Banco BPM from potentially funding Russia’s war against Ukraine. Despite the collapse of the merger, Rome maintained this decree.
Expected EU Actions and Italian Response
Sources indicate that the EU plans to order Italy to withdraw the specific decree that imposed conditions on UniCredit’s failed bid. Concurrently, Brussels will challenge the broader “golden power” legislation through a separate infringement procedure, questioning its compatibility with EU law.
When asked about these reports, Giorgetti stated, “When the EU’s remarks will arrive, We will evaluate them. I am simply saying that the Government is applying an effective law. If you want to change the law, it is up to Parliament to do so.” The European Commission is expected to send two separate letters to Italy by mid-November, formally initiating the proceedings.
Should the EU ultimately rule that the conditions imposed on UniCredit were unlawful, the bank could assess whether to seek damages from the Italian government. However, Minister Giorgetti has already signaled that Rome is prepared to contest any such proceedings in an EU court.
Broader Implications
Italy is one of several EU member states that have extensively utilized “golden power” legislation to safeguard strategic interests in critical sectors, including banking, defence, and telecommunications. This impending legal confrontation between Brussels and Rome highlights the ongoing tension between national sovereignty over strategic assets and the EU’s push for a more integrated single market.
