The General Court of the European Union annulled the European Commission's decision that support measures granted to Italy's Banca Tercas SpA in 2014 by the country's deposit guarantee fund constituted incompatible state aid.
The deposit guarantee fund, Fondo Interbancario di Tutela dei Depositi, or FITD, covered Banca Tercas' negative equity and granted it certain guarantees as part of the support measures.
The EU court said March 19 that evidence in the case indicated that the FITD — a consortium of banks governed by private law — acted independently when it adopted the measures to bail out Banca Tercas, which was placed under special administration in 2012 after the Italian central bank identified "irregularities" at the lender. This is contrary to the commission's conclusion that the funds provided by the FITD to rescue the troubled lender were controlled by Italian public authorities.
In 2016, Italy appealed to the European Court of Justice to reverse the commission's December 2015 ruling that the support measures granted to Banca Tercas broke EU state aid rules.
In response to the latest ruling, the commission said it will carefully study the decision and reflect on its possible next steps, Reuters reported, citing a spokesman.
Meanwhile, Banca Popolare di Bari SCpA, which acquired Banca Tercas as part of the bailout plan, is considering taking legal action against the commission, according to the newswire. The bank said it will also look at potential claim for compensation. Italian Foreign Minister Moavero Milanesi said Italy will also consider seeking compensation from the European Commission, Reuters reported.