EU Macro Ponzi: Some fascinating stuff from Italy.
August - Italy imposes 40% windfall tax on banks because of their unfair excess profits (from lending to the government at non-zirp interest rates)
September - They tweak the terms in order to allow the banks to limit the excess tax burden if the banks increase their reserve buffers (government bonds holdings)
Basically they are so desperate because no one's buying their bonds that they have to blackmail the banks with 40% taxes.
Some gem quotes:
"Italy will revisit a contested windfall tax on banks by giving lenders the option to boost their reserve buffers instead of paying the levy."
"The new terms favour banks that hold a higher proportion of government bonds among their assets because they carry a zero risk weight."
"Rome intends to use revenues from the levy to fund tax cuts and state guarantees on loans to small and medium-sized enterprises."
"Italy's antitrust body will monitor banks to make sure they don't charge customers more for services to offset the levy, the amendment said."
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