May 18, 2018 / 3:00 PM / a year ago

Stick to commitments, EU tells Italy on Monte dei Paschi plans

FILE PHOTO: European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium, March 12, 2018. REUTERS/Yves Herman/File Photo

BRUSSELS (Reuters) - The European Commission said on Friday Italy had to stick to commitments made in the state-sponsored restructuring of its Monte Paschi (BMPS.MI) bank two Italian parties about to form a government called for a new “mission” for the troubled lender.

A government programme agreed by leaders of the League and the 5-Star Movement, the two parties that won the most parliamentary seats in the March 4 election, called to scrap the Tuscan bank’s restructuring plan which involved public money — state aid which is tightly controlled in the EU.

“The Commission is monitoring the implementation of its state aid decision. It is the responsibility of Member States to comply with commitments they have given,” a spokesman for the European Commission said.

Last year, the Commission and Italy reached a preliminary agreement on a state bailout for Monte dei Paschi that included heavy cost cuts, losses for some investors and a cap on pay for the bank’s top executives.

Reporting by Francesco Guarascio, writing by Robert-Jan Bartunek

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