Is it true that resolving the crisis of the Veneto banks will cost the State 17 billion?

The State’s cash injection connected to the liquidation of Veneto Banca and Banca Popolare di Vicenza totals about €4.8 billion, of which €3.5 billion to Banca Intesa Sanpaolo to cover its capital needs following the acquisition of the banks’ ‘good’ assets, and €1.3 billion to cover the costs of the corporate restructuring that Intesa must implement to satisfy EU requirements on State aid.

In addition, the State guaranteed the debt held by Intesa as a result of the sale imbalance (€5.4 billion, up to a maximum of €6.4 billion), and granted other guarantees, totalling an estimated €400 million, to cover various risks (for a total guaranteed amount of approximately €6 billion). These amounts refer to guarantees and not to expenses incurred by the State in relation to the rescue. Therefore, they represent the maximum amount the State may be called upon to pay under extreme and highly unlikely circumstances, because:

• the credit owed to the State to cover the cash outlay or the payment of the guarantees takes precedence over that of other creditors in the liquidation (with the exception of the expenses of the liquidation proceeding, which must be paid prior to any distribution to other creditors);
• Assuming that the funds recovered through the sale of the assets in liquidation are in line with the average bad debt recovery rate for the Italian banking system in the ten years 2006-2015, the State will recover the money it has invested.