The European Central Bank (ECB) is getting ready to lambast Italian Prime Minister Giorgia Meloni after Italy surprised global leaders by introducing a €3 billion banking windfall tax.
The unexpected move caused concern in the financial markets and raised questions about how well Rome and Frankfurt are communicating.
The ECB plans to send an official letter to Prime Minister Meloni’s government to remind them how important it is to let Frankfurt know about financial decisions beforehand.
This lack of communication seems to be a major reason why the value of Italy’s banking shares dropped by a huge €10 billion last week.
Reports say that the ECB’s main office in Frankfurt didn’t know about this tax before it was announced.
Italian daily Corriere della Sera said the ECB hadn’t been told about the banking tax. Even though the ECB can’t directly stop what Italy is doing, it has criticised similar ideas in Spain and Lithuania in the past.
Giorgia Meloni, who leads Italy, has often disagreed with the ECB about how it sets interest rates.
She has even said that the bank’s decisions might end up hurting the economy more than helping with inflation.
