Italian government faces a high-stakes bank merger clash with Brussels

On Wednesday, the Eurogroup — the meeting of finance ministers from eurozone countries — will discuss whether the Italian government’s use of discretionary or “golden” powers to block UniCredit’s acquisition of a competitor was justified.

Italy’s golden power is a national security filter for deals in strategic assets such as defence or energy and functions like a veto. The government is allowed to intervene directly in the market and stop deals that it believes are not beneficial to the country.

Italy’s Minister of Economy, Giancarlo Giorgetti, will be defending Rome’s position.

The following day, the Economic and Financial Affairs Council (Ecofin) will convene and Giorgetti could also hold discussions with EU Financial Markets Commissioner Maria Luís Albuquerque.

The government aims to avoid, or at least delay, infringement proceedings against Italy and to demonstrate that its intervention in the case was legitimate.

On Monday, the UniCredit Group lodged an appeal with the Council of State — the supreme administrative court of Italy and the government’s main legal advisor — against a July ruling by the Regional Administrative Tribunal (TAR) of Lazio, which upheld two of the four restrictions imposed by the government — namely, the requirement to end all activities in Russia by January 2026 and to maintain Italian investments in Anima Holding.

The government’s use of golden power is said to have discouraged UniCredit’s shareholders from supporting the acquisition of its rival.

Had the merger gone ahead, UniCredit would have become Italy’s largest bank by market capitalisation.

On 14 July, the European Commission stated that the Italian government’s actions breached the EU Merger Regulation, the Capital Movements Directives, the ECB’s powers of prudential supervision, and other financial services directives.

Before issuing a formal opinion, Brussels gave Italy one month to respond. The deadline for that opinion, initially set for October, was later postponed to 13 November, although it could be moved yet again.

So far, the Italian government has maintained its stance, asserting its sovereign right to protect strategic national interests covered by its special powers — which include banking and savings.

Italy’s defence also argues that on 23 July, UniCredit withdrew its public exchange offer (OPS) for Banco BPM. This, Rome claims, removes the EU’s competence to act, since Brussels lacks jurisdiction over national legislation except in specific cases.

There are also several rulings of the Court of Justice of the European Union in favour of this position.

However, this may not be enough to satisfy the Commission, which remains wary of government intervention in the banking sector — believing that European institutions must be free to compete with their American and Chinese counterparts.