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Meloni sticks by Italian bank windfall tax despite ECB criticism

Levy poses risk to eurozone financial stability by reducing Italian lenders’ retained earnings, says central bank

The European Central Bank has taken aim at Italy’s windfall tax on banks, warning that it risked making the sector more vulnerable to an economic downturn and urging Rome to carefully assess the impact of the levy.

The ECB’s non-binding legal opinion, published as its governing council met in Frankfurt on Wednesday, is set to intensify tensions with Rome, already elevated after rate-setters’ sharp increases in borrowing costs.

But in a Wednesday night interview, Italian prime minister Giorgia Meloni ruled out scrapping the tax, though she said the details could be amended provided the revenues remained “unchanged” and the tax still yielded the “just under” €3bn in revenues Rome was now expecting.

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