Italy's banking stocks led European equity markets higher on Monday as investors reacted with enthusiasm to confirmation that the Italian government would ride to the rescue of two flailing regional banks.
However, detractors of the deal agreed principally between the European Commission, the Italian government and the country's second-largest lender, Intesa Sanpaolo (which will accept state help to buy the banks' sound assets), have criticized the liberal interpretation of the European Union's rules, saying it has destroyed the credibility of the bloc's banking union.
"With this decision, the European Commission accompanies the Banking Union to its deathbed. The promise that the taxpayer will not stand in to rescue failing banks anymore is broken for good," bewailed German MEP (member of European Parliament) Markus Ferber in a statement on Sunday.
Italian Economy Minister Pier Carlo Padoan told reporters on Sunday, however, that the critics should pipe up with a better solution if they could see one – which he himself couldn't.
Indeed, the recent purchase of failing Spanish lender Banco Popular by larger peer Santander is being contrasted with Italian situation by observers who note the principal differences between the two resolutions – namely, the protection of Spain's taxpayers contrasted with the protection of some of Italy's private investors.