At the Ambrosetti Forum in Cernobbio, Italy, Vice Premier Matteo Salvini singled out Spain's bank policy for praise. On Sunday he told Bloomberg News, "I'm fundamentally at odds with Sánchez and the Spanish government on pretty much everything, but the initiative they've taken on banks' profits, interest income and expenses, and fees is an absolutely intelligent one." "It's something we'll propose in the budget, absolutely."
Speaking on the shores of Lake Como, Salvini added, "It's going to be another record year for bank profits, close to €50 billion ($58 billion)." He argued that a slice of the profits is driven by fees charged by banks and by the spread between interest earned and interest paid, and that "a contribution on that item, which is entirely borne by citizens, is absolutely desirable." Over recent years, Italy has relied on temporary bank measures to raise revenue, and one of them was used last year to help finance a slight trim to income taxes for middle earners. "Banks have had profits they've never had. They can contribute and I am sure they want to," he said. "Energy companies can do their part, too."
Inside Giorgia Meloni's coalition - her Brothers of Italy, Salvini's nationalist League, and the business-friendly Forza Italia - taxing banks has been a flashpoint. Last month, a Meloni ally told Bloomberg News that the budget debate will probably include a levy on energy firms.
Salvini is also contending with pressure from the ultranationalist National Future party, led by former general Roberto Vannacci. A Youtrend poll on Friday ranked Vannacci's party as the second-strongest force on the right, behind Meloni's movement, while the League placed seventh overall. Salvini dismissed talk of resigning: "No. Never say never. I am focused now, we have a very important year ahead both for the government and to win the election. So this year I'm entirely focused on the work ahead." He added, "Polls have always indicated the League on a downward trajectory, except for voting day," and "For me, the poll that matters is the day of the vote."
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If Italy adopts Spain's model, banks could be asked to make a new contribution connected to fees, profits, and to both interest income and expenses. Rome has already shown it will tap temporary measures on lenders to fund priorities, including last year's modest tax cut for middle earners. Keep an eye on the budget talks and whether energy companies get folded in, because any new contribution could ripple through bank earnings and the funds in your portfolio that hold them.
