(Adds parliament will have to give green light to debt hike)
ROME Dec 19 Italy's cabinet will meet on Monday
to prepare the way for any eventual increase to the national
debt to cover the cost of saving Monte dei Paschi di Siena
and other ailing banks, government sources said.
Monte dei Paschi has launched a 5-billion-euro ($5.2
billion) capital increase and must raise the money by the end of
the year or face being wound down. If it cannot find takers in
the private sector, the government will be forced to step in.
Sources told Reuters last week that the government was ready
to pump 15 billion euros -- just under one percentage point of
gross domestic product -- into Monte dei Paschi and other ailing
Before it can do that, the cabinet needs parliamentary
authorisation to lift national debt levels.
On Monday, ministers are due to approve the eventual
request, sources said. There was no word on when it might call
on parliament to give it the green light.
(Reporting by Giuseppe Fonte and Francesca Piscioneri; Writing
by Crispian Balmer)