A rescue deal that will allow Italy to inject up to €6.6 billion into the country’s fourth largest bank Monte dei Paschi di Siena has received all necessary approvals by EU authorities, a top central bank official said.

The Bank of Italy’s deputy governor Fabio Panetta told a press briefing yesterday that Monte dei Paschi’s bailout was a “a done deal”. At the same briefing, chief supervisor Carmelo Barbagallo said the EU Commission had only to formalise its approval but there were no doubts that, unlike regional rival Popolare di Vicenza and Veneto Banca, Monte dei Paschi would be able to tap state aid to remain in business.

Barbagallo said Monte dei Paschi would close a bad loan sale, a key plank of its rescue plan, thanks to the fact that banking industry bailout fund Atlante could now divert cash previously earmarked for the Veneto banks’ soured debts to buy Monte dei Paschi’s bad loans.