Amid war, Europeans support a more ‘geopolitical European Union’
Al JazeeraNov 26, 2022
The Facts
On Monday, Italian PM Giorgia Meloni approved a one-off 40% windfall tax on record-breaking profits earned by Italian banks due to increased interest rates, stating that the proceeds will be used to help mortgage holders and cut taxes.
Following the announcement, Italy's banking share index plunged 7.3% on Tuesday, with shares in the country's two largest banks, Intesa Sanpaolo and UniCredit, dropping by 8% and 6.5%, respectively.
The Spin
Establishment-critical narrative
Italy's government has recognized the need to balance helping businesses with reining them in when profits surge out of control to the detriment of the public good. Italian banks have made record-breaking profits and have avoided passing anything on to their customers. There is no reason for banks to keep billions in excess profits while millions struggle to pay off their inflated mortgages and other loans.
Pro-establishment narrative
Meloni's populist party have opted for an easy win with the electorate who are currently facing a cost of living crisis. However, the repercussions of this sudden and unexpected economic policy remain to be seen, as diminishing banking revenue could have influences on future investment and fiscal stimuli. Having already wiped value off of banks' stocks, this policy could continue to backfire for Italy's economy.
