(Adds quotes on fiscal treatment of financial aid)
By Francesco Guarascio
STRASBOURG Dec 12 The European Commission is
ready to discuss with Italy several options to address problems
in its banking sector, the vice president of the EU executive
said on Monday, signalling state support would be viewed
benignly under EU fiscal rules.
The Italian government is considering different options to
rescue Banca Monte Paschi di Siena if the bank fails
to get the 5 billion euros ($5.3 billion) from private investors
it needs to stay in business, a Treasury source said on Monday.
"We are in close contact with the Italian authorities and we
are ready to discuss different solutions within our legal
framework," Valdis Dombrovskis told the economic committee of
the European Parliament in a regular hearing in Strasbourg.
Without a direct reference to Monte Paschi, he said that
Italy's problems can be tackled within EU rules on state aid and
on the so-called bail-in, a system that imposes losses on
private investors before a public bailout.
Italy's third-biggest bank is pressing ahead with a
last-ditch attempt to raise the cash in the market despite
political uncertainty after Prime Minister Matteo Renzi's
resignation following a Dec. 4 constitutional referendum.
But the government did not rule out a possible public
intervention if the plan failed.
That would come with losses for private creditors, although
it is still unclear how many investors would be affected.
The Commission said in November that Italy's 2017 budget is
at risk of breaching EU fiscal rules due to excessive spending.
The possible state support for Monte Paschi has triggered
further doubts about Italy's compliance with the rules.
But Dombrovskis said on Monday that any state support for
banks was likely to be treated as a "one-off expense", which
would not affect Italy's debt and structural deficit.
(Editing by Louise Ireland)