Italy econ min says Monte Paschi recapitalisation plan works

ROME: A 5 billion euro ($5.3 billion) recapitalisation plan to keep Banca Monte dei Paschi di Siena (MPS) in business will work, Italian Economy Minister Pier Carlo Padoan said on Friday. MPS shareholders approved the plan on Thursday but investors have failed to give it firm backing so far, partly due to worries about political risk ahead of a Dec. 4 referendum.

"The plan works," Padoan said in an interview on Sky television.

"It's clear that we are in a phase of uncertainty, but the market is already taking into account that uncertainty, to some extent they have priced in that uncertainty, so in reality the markets are giving less worrying signals than it might seem."

Asked whether the Treasury, which with a 4 percent stake is MPS's biggest shareholder, would take part in a stock sale which is part of the plan, Padoan said: It is "consistent with what I am saying".