18:15 GMT30 July 2021
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    The Italian financial system has been in bad shape for years, but Brexit has put additional pressure on Italian banks that have struggled under the deadweight of bad loans. If not dealt with, the financial system of the third largest economy in the Eurozone could "lead to its collapse," the Izvestiya newspaper asserted.

    Italy's key lenders, including Intesa Sanpaolo, Banca Monte dei Paschi di Siena SpA (BMPS), Mediobana and UniCredit lost approximately a third of their value after the Brits voted to leave the European Union. But it has not been a great year for the banks regardless.

    "BMPS shares are veering toward a 76% slide for 2016, on course for their worst yearly loss on record," MarketWatch reported earlier this month. "UniCredit SpA, Italy’s largest bank by assets, has slid 63%, Banca Popolare di Milano SpA is down about 64% and Intesa Sanpaolo SpA has given up 46%."

    According to the latest "Italy: Selected Issues" report released by the International Monetary Fund, Italian banks have about €360 billion ($525 bln) in nonperforming or bad loans on their balance sheets, which is equal to approximately 25 percent of Italy's GDP.

    MEP Fabio Massimo Castaldo of Italy's anti-establishment Five Star Movement pinned the blame for the crisis on Prime Minister Matteo Renzi.

    "The crisis did not happen overnight," he told the Russian daily, naming "unreasonable political pressure," unsuccessful reforms and unpunished violations against investors as major factors that have exacerbated the problem.

    For Castaldo, saving banks by using taxpayers' savings and not private investors is a wrong choice that will only make Italians mistrust European and national institutions even more. It "has also threatened the stability of the Eurozone."

    Matteo Renzi has done nothing to boost economic development, adversely affecting the Democratic Party, he added. The Five Star Movement won local elections held in Rome, Turin and other municipalities in June. 

    "The most recent and the most important elections in our history show that people support us," Castaldo said.

    The MEP also mentioned that the party restructured its expenditures, saving more than 60 million euros. "These funds were allocated to support small and medium-sized businesses. As a result, a total of 2,247 new companies have been created in the country," he detailed.

    "These steps are aimed at helping Italy change. We want to support those Italians who are not employed at the moment. We want to help them to learn a new profession and return to the market," he added.


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    Italy, Matteo Renzi, Five Star Movement (M5S), Brexit, banking system, financial system, debt, Eurozone, economy
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