Brussels has fired a formal warning at Italy over its sweeping golden power takeover rules, escalating a clash that has been simmering inside the EU’s banking and corporate landscape. The European Commission says Italy’s broad authority to review or block deals in strategic sectors has spilled too far into the financial industry and could breach EU law by restricting cross-border consolidation. The spotlight intensified after Italy’s intervention derailed UniCredit’s attempt to acquire Banco BPM, a move the lender directly blamed on government interference. With the EU pushing for smoother banking mergers to strengthen the bloc’s financial backbone, the standoff is turning into a real-time stress test of how far national interests can stretch inside a unified market. Italy now has two months to reply and fix the issues raised, while Economy Minister Giancarlo Giorgetti signaled Rome will draft legislation to clarify the rules without giving up its principle of defending national interests. Brussels insists the warning is about the law itself, not any single deal, although multiple legal battles and recent EU procedures show how deeply the dispute runs.
The tension stems from Italy’s desire to keep control over strategic sectors such as defense, telecoms and parts of finance, a stance strengthened by domestic court rulings that have repeatedly affirmed the government’s right to shield sensitive industries. This approach, however, runs directly into the EU’s efforts to streamline banking mergers and prevent member states from blocking acquisitions that could strengthen the bloc’s financial stability. Analysts say the conflict signals a bigger shift in Europe where governments are becoming increasingly protective of national assets even as Brussels pushes for deeper integration. Reuters previously reported that Italy was willing to tweak some parts of the golden power framework without fundamentally diluting it, but the EU wants clearer limits to prevent unpredictable interventions. The Commission highlighted that its action is separate from a different ongoing procedure that examines a decree tied to UniCredit’s bid for BPM, a decree that required the bank to wind down Russia operations by early 2026. The separation of the two processes shows Brussels is preparing a broader cleanup of interventionist policies across the region.
What happens next could define how agile Europe’s banking sector becomes heading into 2026. Italy’s insistence on keeping its defensive tools intact reveals how sensitive governments are to foreign influence in key industries, especially after years of geopolitical tension and economic shocks. But Brussels argues that overreaching national controls hinder market efficiency and risk creating fragmented policies that push investors away. Banks across Europe have been under pressure to consolidate for more than a decade as low interest rates, rising compliance costs and global competition reshape the sector. The Commission’s warning signals that it wants predictable, rules-based oversight rather than ad-hoc political decisions. Traders say today’s move adds another layer of uncertainty to European market sentiment already strained by currency swings and rate expectations. The next two months will determine whether Italy adjusts its golden power rules enough to satisfy Brussels or whether the dispute escalates into a legal showdown that could redefine cross-border banking activity inside the EU.
