Italy’s parliament has given the final green light to a decree softening a controversial windfall tax on banks that spooked investors.
(Bloomberg) — Italy’s parliament has given the final green light to a decree softening a controversial windfall tax on banks that spooked investors.
Prime Minister Giorgia Meloni’s right-wing government won backing for a plan to tax the profits of banks, but which offers lenders the option to avoid payment if they set aside additional capital reserves. The parliamentary vote Thursday was the last step required to make the legislation binding.
The approval caps weeks of political negotiations over a tax that was announced in August, wiping billions of markets value over the summer. The changes were introduced by the government last month with an amendment, which was strongly supported by Forza Italia, a junior party in Meloni’s coalition.
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The amended decree also back-tracks on a plan to cap fares for flights on domestic routes to Sardinia and Sicily, a plan which sparked angry reaction across the aviation industry. Ryanair Holdings Plc Chief Executive Officer Michael O’Leary weighed cutting routes in response and called the move “illegal.”
The impact of the decree on banks and the government’s coffers is still unclear, with the government still expecting inflows of almost €3 billion ($3.2 billion) according to the last public remarks on the matter.
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