Italy PM Meloni takes ‘full responsibility’ for bank tax

Italy’s Prime Minister Giorgia Meloni looks on, as she is welcomed by U.S. President Joe Biden (not pictured), in the Oval Office at the White House, in Washington, U.S. July 27, 2023. REUTERS/Jonathan Ernst/File photo

MILAN  -Italian Prime Minister Giorgia Meloni on Monday took “full responsibility” for last week’s shock decision to impose a one-off bank tax that has been blamed for causing lasting damage to her government’s credibility with financial markets.

In comments to Italian newspapers Corriere della Sera, la Repubblica and La Stampa, Meloni said the 40 percent levy had no punitive intent.

“I would do it again. Because I believe that the right things must be done…This is a decision that I took (on my own)”, she was quoted as saying by la Repubblica.

“It’s a sensitive issue and I take full responsibility for it.”

In a drive to shore up its political base, Italy’s conservative government unveiled the surprise decision late last Monday, only to backtrack in part by clarifying there was a cap on proceeds 24 hours later – and after having changed the threshold to apply the tax in the meantime.

The new tax targets a rise in profits banks have derived from higher rates.

Sources told Reuters when the measure was announced the Treasury expected to draw less than 3 billion euros ($3.3 billion) from the tax. However, prior to the clarification on the cap, calculations pointed to much higher sums.

With Economy Minister Giancarlo Giorgetti noticeably absent from the press conference to announce the tax, Meloni said he had been informed about the decision.

However, other government members had been kept in the dark because of the sensitivity of the matter, she said.

The government had toyed with the idea of taxing banks’ record profits from higher rates but appeared to have set it aside, and Rome’s muddled communication over the issue has caused alarm among international investors.

Asked about a veto posed by junior coalition partner Forza Italian on a potential alliance with France’s Marie Le Pen at next year’s EU parliamentary elections, she said it was too early to discuss any such moves.

“I don’t veto anyone, I don’t feel I have the authority to do that and in any case it’s premature”, she said.