Italy's windfall tax for banks: a good move?

The Italian government has announced a hefty 40 percent windfall tax for banks. The government hopes to raise "several billion" euros to ease the burden on citizens with the move, said Matteo Salvini, deputy prime minister and leader of the Lega party. Europe's press takes stock.

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Corriere del Ticino (CH) /

A little summer theatre

The windfall tax will be short-lived, Corriere del Ticino believes:

“Only part of the profit is to be subject to the additional tax, and only if it exceeds a certain threshold. ... In view of the initially violent reaction of the financial markets and the major interests at stake - as well as the confused communication and last-minute corrections - the parliamentary decree will most likely be short-lived. Like the tax measure passed a year earlier on oil company profits by Giorgia Meloni's predecessor Mario Draghi, who certainly can't be accused of having populist sympathies. So this 'extra tax' will generate more summer controversy than additional tax revenues.”

Eesti Päevaleht (EE) /

The devil is in the details

Eesti Päevaleht says the tax makes perfect sense:

“The technical details of the bank levy must nevertheless be carefully considered. To what extent the negative effects bankers warn about become manifest will depend on the details. This tax will hurt less than other tax hikes or new taxes. ... If banks are to be subject to higher taxes, it should be done quickly. We also point out that anyone with a little spare cash can 'tax' the banks a little themselves. Instead of keeping the money in a current account they can put it in a savings account, even if only for one month, because even for a one-month investment you get a few percent interest per year.”

Handelsblatt (DE) /

Legally questionable and economically risky

Handelsblatt sees serious flaws:

“First, imposing a special tax on a single industry is questionable from a legal point of view. Who decides what is unjustified 'excess profit' and what is normal profit that helps keep the banking sector economically sound? ... The second and more serious problem, however, is in fact the financial stability, which Meloni is recklessly and unnecessarily putting at risk with her plan. The special tax is poorly designed and was announced unexpectedly, without any preparation. ... The right-wing government alliance can't afford too many miscalculations of this type without causing serious and lasting damage to Italy and the Eurozone as a whole.”

Visão (PT) /

Bold, reasonable and surprising

Visão is surprised to see a far-right government make such a clever move:

“No Italian would have expected this head of government, leader of a far-right party, to address the heart of the financial and capitalist system with a simple but reasonable argument: the institutions and companies of all sectors that have made, and will continue to make, fabulous profits thanks to inflation and the insane interest rate hikes of the central banks have a duty to provide social support. ... Whether it comes from the left or the right: this is a courageous step”

La Repubblica (IT) /

Politically motivated

With this move the government is taking the wind out of the opposition's sails, La Repubblica surmises:

“The anti-popular right that cut the citizen's income benefit has transformed itself into a social right and introduced an unforeseen measure that hits the banking world, towards which the great mass of voters are not exactly well-disposed. With this, it has pulled the rug from under the feet of the extreme left, but also the Cinque Stelle party and certain perhaps not small sectors of the Partito Democratico. Indeed, one has the feeling that in the race for public approval, Giorgia Meloni and above all Salvini have beaten the rather combative front of leftist populism on the home straight.”

De Morgen (BE) /

Banks must assume responsibility

De Morgen sees a paradigm shift:

“The call to take back political 'control' is now being translated into the economy. For decades, economic deregulation was the norm and politicians were expected to simply look on as the market managed its own affairs. There was no alternative, was there? Successive crises are forcing governments of all stripes to test whether there are alternatives. And so they should. If enterprises such as banks have the ambition to play a central socio-economic role, they should also be reminded of their responsibilities.”

Les Echos (FR) /

Demagogic and misguided

The move is ill-conceived from an economic point of view, the business paper Les Echos explains:

“The unfortunate thing is that this decision has more to do with demagogy than with economic efficiency. It forgets that for almost ten years the interest rates offered by the very banks that are now being criticised enabled businesses to obtain cheap financing and households to obtain cheap consumer credit. Above all, it denies their central role in the functioning of an economy. Lastly, it deprives customers of any chance to increase the returns on their deposits.”