German hard line on Italy may rebound with Deutsche in crisis
FRANKFURT — Germany’s insistence that Italy accept tough conditions in tackling its problem lenders may rebound now that Berlin faces a banking crisis of its own.After months of argument over how to deal with bad debts in the Italian financial system, Deutsche Bank instead took centre stage on Friday, with its share price near record lows and its chief executive trying to reassure staff and markets that Germany’s biggest bank remains robust.For many in Italy, including Prime Minister Matteo Renzi, this diverted attention from the country’s own difficulties in recapitalising the likes of Banca Monte dei Paschi di Siena.Renzi went easy on expressing any Schadenfreude on Friday, but knocked the ball back into the German court. "We have always said that the European Union has to do everything in its power to fix the problems of the banking sector and the main worry focuses on the German lenders," he told national broadcaster RAI.He is not alone. The International Monetary Fund has named...
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