EU approves Italy’s plan to transfer some state-guaranteed loans to AMCO

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European Union flags fly in front of the European Commission headquarters in Brussels, Belgium, June 17, 2022. REUTERS/Yves Herman

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MILAN, Aug 26 (Reuters) – The European Commission on Friday gave the green light to Italy’s plan to shift some state-guaranteed loans from banks to a new platform run by state-run bad debt specialist AMCO. assistance.

Italy has told the Commission it is willing to allow banks to transfer around 12 billion euros in loans from their balance sheets, the EU executive wrote in a statement.

“This scheme will allow Italy to maximize loan recovery while reducing the impact of existing state guarantees on the national budget and the effects on borrowers with good viability prospects,” the European Commissioner told Competition, Margrethe Vestager.

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The Commission found that under the scheme the Italian State will be remunerated in accordance with market conditions.

It also noted that the sale of loans to the platform managed by AMCO as well as any new loans granted by it will be made at market conditions.

During the COVID-19 pandemic, Italy took on 277 billion euros ($277.42 billion) in COVID-related corporate debt, far more than other European countries. Read more

Some of Italy’s 2.7 million small and medium-sized enterprises (SMEs) that have taken on state-guaranteed debt are now heavily exposed to soaring electricity and gas prices, undermining their ability to meet their debts.

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Reporting by Francesco Zecchini Editing by Keith Weir

Our standards: The Thomson Reuters Trust Principles.

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