EU warns Italy over conditions on Unicredit-BPM merger

Lailuma Sadid
Credit: REUTERS/Yara Nardi

Brussels (Brussels Morning Newspaper) – The European Commission informed Italy on Monday that attaching specific conditions to UniCredit’s proposed bid for Banco BPM might violate EU law.

The European Commission has formally warned Italy that imposing special conditions on UniCredit’s planned acquisition of Banco BPM could breach European Union law. This development marks a significant escalation in the regulatory standoff between Brussels and Rome over the future of one of Italy’s largest banking mergers.

Why is the EU warning Italy over merger terms?

In a letter sent to Italy setting out its preliminary opinion, the European Commission stated that a decree issued by the Italian Prime Minister’s Office on April 18 imposing certain obligations on the merged entity may constitute a violation of EU merger regulations and other provisions of EU law.

According to the Commission, under Article 21.4 of the EU Merger Regulation, only Brussels has the legal authority to set conditions on cross-border mergers of this scale, not national governments.

Why does the commission say Italy overstepped authority?

The European Commission argues that intervention by Italy is overstepping national authority and undermining the exclusive competence of the EU in the area of merger control of cross-border deals. If Italy fails to withdraw or amend such conditions, it can face infringement proceedings against Rome following the principle of EU law, and this may compel UniCredit to withdraw its bid, thereby triggering considerable financial consequences for both banks.

What conditions did Italy impose on Unicredit’s deal?

The memorandum of the Italian Prime Minister’s Office by decree dated April 18, 2025, determines various obligations on UniCredit in view of its announced acquisition of Banco BPM under Italy’s so-called “golden power” mechanism, which permits State intervention in those transactions that are regarded as of strategic importance. 

This includes a series of conditions that the merged UniCredit/BPM entity will have to comply with: maintaining a 100% loan-to-deposit ratio in Italy for five years, keeping up the current levels on project finance and investments in Italian securities while stepping out of any financial activity in Russia in a period not exceeding nine months. 

Such measures are seen as protecting national economic interests but have faced challenges in court and scrutiny from the European Commission. The Italian government has defended its actions, citing national security and the need to protect domestic savings and SME lending as justification for the imposed conditions.

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Brussels Morning is a daily online newspaper based in Belgium. BM publishes unique and independent coverage on international and European affairs. With a Europe-wide perspective, BM covers policies and politics of the EU, significant Member State developments, and looks at the international agenda with a European perspective.
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Lailuma Sadid is a former diplomat in the Islamic Republic of Afghanistan Embassy to the kingdom of Belgium, in charge of NATO. She attended the NATO Training courses and speakers for the events at NATO H-Q in Brussels, and also in Nederland, Germany, Estonia, and Azerbaijan. Sadid has is a former Political Reporter for Pajhwok News Agency, covering the London, Conference in 2006 and Lisbon summit in 2010.
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