Controversy Over the Ministry’s Intervention in UniCredit’s Deal

This week, Italy’s Ministry of Economy and Finance (MEF) finds itself at the center of a fierce debate over its use of the so-called “golden power” to block a major transaction involving UniCredit, one of the country’s leading banks. The golden power is a legal prerogative granted to the state to intervene in strategic corporate operations deemed vital for national interests, such as those affecting financial stability or national security. Critics argue that MEF’s recent invocation of this power in the UniCredit deal exceeds legal bounds and undermines investor confidence in Italy’s regulatory framework.

The contested transaction involved a €3.5 billion capital increase by UniCredit, aimed at strengthening its balance sheet and funding expansion plans across Europe. In a surprise move, MEF issued a decree last month halting the operation, citing concerns over foreign influence and the protection of Italy’s financial sovereignty. However, legal experts have raised alarms, noting that the golden power should be reserved for matters explicitly linked to national security or public order. They maintain that a standard capital raise—already approved by UniCredit shareholders—falls outside these parameters.

Shareholder groups have swiftly filed a challenge in administrative court, accusing MEF of overstepping its authority and causing unwarranted market volatility. The plaintiffs point to previous cases where the golden power was applied sparingly and with detailed justification, contrasting sharply with MEF’s brief decree, which offered scant reasoning beyond generic references to “strategic interests.” Market analysts warn that this regulatory uncertainty risks deterring future foreign investment, as companies may fear abrupt government intervention.

MEF officials defend the decree, arguing that Italy’s financial system remains vulnerable after years of economic stagnation and banking sector turmoil. They assert that protecting UniCredit’s stability—and by extension, the broader economy—justifies swift action. “We acted in the interest of taxpayers and the nation’s financial security,” said an MEF spokesperson. Nonetheless, opponents counter that transparency and proportionality are cornerstone principles of administrative law, and that MEF’s opaque decision-making process breaches these standards.

The case underscores a broader tension in European governance: balancing state oversight with free-market principles. Golden power regimes exist across the continent, yet few nations have wielded them as aggressively as Italy in this instance. Germany and France have used similar powers to vet foreign takeovers in defense and technology sectors but have largely refrained from intervening in financial markets. Italy’s assertive stance could prompt Brussels to revisit the scope and limits of member states’ special intervention rights.

As the administrative court prepares to hear arguments next month, attention will focus on the legal interpretation of “strategic assets.” If the court finds MEF’s actions unjustified, it could rule the decree invalid and force Italy to compensate investors for losses incurred. Such an outcome would signal to policymakers the need for clearer guidelines and greater accountability. Conversely, an upholding of MEF’s authority might embolden the government to employ golden power more broadly, increasing regulatory risk across Italy’s economy.

In a climate of rising geopolitical competition and economic fragility, the UniCredit episode represents a test case for state-market relations in the Eurozone. For businesses and investors, clarity on when and how governments can intervene is paramount. As Italy grapples with these questions, the world will watch closely whether the golden power proves a prudent safeguard or a blunt instrument that threatens the nation’s financial credibility.