State aid: Commission approves amended commitments for Banca Monte dei Paschi di Siena

The European Commission has approved under EU State aid rules certain amendments to a set of commitments submitted by Italy, on the basis of which the Commission in July 2017 had approved Italian support for a precautionary recapitalisation of Monte dei Paschi di Siena (MPS) under EU rules. As part of the original commitments submitted by Italy, and approved by the Commission, the bank committed to reinforce its capital position by issuing a certain amount of “Tier 2” instruments (subordinated debt) by a specified deadline. Italy has now requested an extension of this deadline. To counterbalance the extended deadline and minimise possible distortions of competition caused by the extension, Italy proposed a series of additional commitments aimed at further reducing costs and restoring the bank’s viability. Under EU State aid rules, the Commission may approve amendments provided that the new commitments can be considered equivalent to those originally submitted. The Commission concluded that the Italian amendments preserve the balance of the original commitments and do not affect the overall timeframe for the implementation of the bank’s restructuring plan. On this basis, the Commission concluded that aid Italy granted in July 2017 for the restructuring of MPS remains compatible with EU rules and has approved the amended commitments. More information will be available on the Commission’s competition website, in the public case register, under case number SA.55121.