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maltatoday, WEDNESDAY, 21 DECEMBER 2016 11 Business Today www.creditinfo.com.mt info@creditinfo.com.mt Tel: 2131 2344 Your Local Partner for Credit Risk Management Solutions Supporting you all the way Italy planning €20 billion bailout for its struggling banks The Italian government will seek parliamentary approval to borrow up to €20 billion to support its fragile banking sec- tor and potentially rescue Monte dei Paschi di Siena. Monte dei Paschi, recently judged the weakest of the European Union's major banks, needs to dispose of a mountain of bad loans and raise €5 billion in capital by the end of this month or else face the risk of being wound down by the European Central Bank. Italy's economy minister Pier Carlo Padoan said the money it was seeking could be used to guarantee adequate liquidity in the banking system. "These resources could also be used as part of a programme to boost capital at banks," he said in a press conference. Prime Minister Paolo Gentiloni, whose government has only been in office for a week, is under pressure because private investors would suffer any losses under EU bailout rules. He described the move as a "precautionary measure", adding: "We believe it is our duty to take this measure to protect savings. I hope all the political movements in parliament share this responsibility." However, Padoan, stressed the funds would be used to ensure adequate liquidity in the banking system and support other struggling banks. Officials have also said they were examining a scheme to compensate retail investors for any losses incurred. Gentiloni's predecessor, Matteo Renzi, resigned after losing a referendum on constitutional reform and was regularly accused of being too close to the banks. A failure of Monte Paschi's recapitalisation would be a blow to Italy's stuttering efforts to revive a banking industry that's burdened with about €360 billion in troubled loans, dragging down the economy by limiting lending. A state intervention to save yet another Italian bank would follow the rescues of Veneto Banca SpA and Banca Popolare di Vicenza SpA following their failed initial public offerings. The government must decide whether to pour yet more money into a company that has received €4 billion in taxpayer-funded bailouts and €8 billion from investors since 2009. The hit taken by bondholders will also be politically sensitive because thousands of them are ordinary Monte Paschi savers. Italy's €2.25 trillion in government debt already stands at 136% of the country's GDP, the second highest ratio in the European Union after Greece. The Italian government has struggled to fix the country's troubled banking industry, which accumulated more than $370 billion of non-performing loans during years of recession. Italy has more bank branches than pizzerias, according to the Organization for Economic Co- operation and Development, and they struggle with high costs and low returns. Monte dei Paschi shares have nosedived 85% since the start of the year, Banco Popolare's have plunged 75%, and UniCredit's have dropped 47%. Italian Prime Minister Paolo Gentiloni described the move as a "precautionary measure" EU accuses Facebook of giving misleading information on WhatsApp takeover The European Commission has accused Facebook of mislead- ing it during its investigation of the 2014 takeover of WhatsApp, opening the company to a possi- ble fi ne of 1% of its turnover. The Commission said Facebook misled it when the company said it was impossible to match users' Facebook and WhatsApp accounts. But in August, WhatsApp said it would do just that, by linking users' phone numbers with their Facebook identities. The statement of objections sent to Facebook will not have an impact on the approval of the $22 billion merger in 2014, the Commission said in a statement on Tuesday. Facebook becomes the latest Silicon Valley target of EU antitrust chief Margrethe Vestager, who has demanded Apple pay back $14 billion in taxes to Ireland and hit Google with two market abuse investigations. Facebook said it had nothing to hide and had acted in good faith. The Commission believes the ability to link the accounts of the two services' users must have existed in 2014, though this is vigorously disputed by Facebook. If the Commission concludes that it was definitely misled, either by accident or design, it could fine Facebook up to 1% of its turnover, which would amount to hundreds of millions of euros. "Companies are obliged to give the Commission accurate information during merger investigations," said Commissioner Margrethe Vestager, who is in charge of competition policy, "In this specific case, the Commission's preliminary view is that Facebook gave us incorrect or misleading information during the investigation into its acquisition of WhatsApp." 'Continued cooperation' Facebook is being asked to respond by 31 January 2017. For its part, it says that it was only very early this year that it found a way to establish a link with the accounts of WhatsApp users, via their phone numbers. And even so, Facebook says in fact it still cannot match accounts with the precision needed for full "cross-platform messaging", which it argues was the Commission's main concern back in 2014. "We've consistently provided accurate information about our technical capabilities and plans, including in submissions about the WhatsApp acquisition and in voluntary briefings before WhatsApp's privacy policy update this year," said a Facebook spokesman. "We're pleased that the Commission stands by its clearance decision, and we will continue to cooperate and share information officials need to resolve their questions," he added. The Commission said its new probe would not undermine its previous decision to approve the $19bn (£16bn) merger of the two companies because it had not relied on the misleading information alone to approve the deal. When WhatsApp announced its new policy in August, it justified it by saying this would lead to an improved service, such as providing "more relevant" friend suggestions, letting businesses send adverts directly to users, and also by dealing more effectively with spam and abuse. But the change has come under scrutiny from regulators across Europe. The day after the new policy was announced, the UK's Information Commissioner (ICO) launched an immediate investigation to see if the alteration broke the UK's data protection laws. In September, the Hamburg Commissioner for Data Protection and Freedom of Information told Facebook to stop collecting and storing the data of German users of WhatsApp. Then in November the UK's Information Commissioner followed suit and told Facebook not to use the data it had gathered from its WhatsApp users in the UK, saying the firm had not obtained valid consent for the move. Meanwhile European data regulators in October also asked the two tech companies to stop sharing data while the new policy was scrutinised.