MILAN (Reuters) - European Union competition authorities will have no reason to object to Italy's rescue of ailing cooperative lender Popolare di Bari, the country's regional affairs minister said on Monday.
The Rome government late on Sunday passed an emergency decree setting aside up to 900 million euros ($992 million) to recapitalize ailing Popolare di Bari.
Minister Francesco Boccia told Radio 24 the scheme had been devised in a way that would ensure compliance with EU state aid rules.
"The measures chosen by (Economy Minister Roberto) Gualtieri allow us to meet all EU rules," he said, when asked whether Brussels could take aim at the scheme after allowing Germany to rescue lender NordLB earlier this month.
"That's why only part of the funds will actually go to Popolare di Bari while the rest must come from the FITD (depositor protection) fund."
EU competition authorities did not immediately respond to a request for comment on the plan on Monday.
The bloc tightened banking rescue rules after the global financial crisis to avoid a repeat of bailouts that depleted public coffers. Under the new rules, taxpayers' money can be used only after investors in a bank have borne losses.
Broker Equita estimated Italy has spent 21 billion euros since 2015 to help its banks. Despite the new rules, Rome has managed to partly limit losses for ordinary Italians who had invested in their local banks.
The latest government plan envisages an injection of up to 900 million euros into state-owned Banca del Mezzogiorno-Mediocredito Centrale so that it can buy into a cash call at Popolare di Bari.
Of that amount, 500 million would be used to quickly bolster Popolare di Bari's balance sheet and the rest set aside in case of future requirements, a source close to the matter said on Sunday.
Italian banks will be asked to shoulder the rest of the bailout through the FITD fund, which only months ago financed the bulk of a 900 million euro rescue package for Genoa-based Carige (MI:CRGI).
The steering committee of the FITD fund is due to meet on Wednesday to discuss Popolare di Bari's rescue.
The biggest bank in Italy's underdeveloped south, Popolare di Bari has been laid low by problem loans which have swelled to a quarter of its total lending.
The bank urgently needs up to 1 billion euros in new capital, its chief executive said in a newspaper interview last week, after its capital reserves slipped below regulatory thresholds.
Like other regional banks, Popolare di Bari has failed to recover from Italy's worst post-war recession which, coming on the heels of a strong credit expansion, bankrupted thousands of businesses, saddling banks with unpaid loans.