According to weekend reports, the windfall tax on Italian banks, which has already been watered down since its implementation in August, will be effectively repealed. Rather than paying the levy, which would have been 40% of extra profits between 2021 and 2023, banks may avoid it entirely by allocating 2.5x of the amount of the tax to strengthening Tier 1 ratios.

The tax sparked discord within the coalition government and garnered criticism from the ECB, representing a significant setback for the Giorgia Meloni administration.

Market reaction 

These comments did not trigger a noticeable market reaction. The EUR/USD pair was last seen trading at 1.0649, gaining 0.02% on the day.