Italy’s own banking crisis may be about to begin

Theresa May was not the only elephant in the room at Thursday’s European Union summit in Brussels, and EU leaders studiously ignored the other one as well. Paolo Gentiloni, Italy’s new Prime Minister – its fourth unelected one in a row since 2011 – must somehow save Monte Paschi di Siena, the world’s oldest bank, from collapse. If he fails to do so – and much will depend on EU help – then it will set off a chain reaction that could easily engulf the Eurozone.

You might have thought, then, that EU leaders would have had something to say about the matter. But no.

Italy’s third largest bank, founded in 1472 in the city that is nowadays de facto capital of the Tuscan province of Chiantishire – teeters on the edge of the abyss. The European Central Bank has ordered it to raise €5 billion to increase its capital base by close of business on New Year’s Eve or go bust.