Tug-of-war over Economic Security: Italy’s “Golden Power” in the UniCredit-Banco BPM Case

In November 2024, UniCredit, a major Italian and pan-European banking group, launched a voluntary public exchange offer to acquire all the ordinary shares of Banco BPM S.p.A. – an Italian banking group operating since January 2017. Expected to be completed by June 2025, the transaction was presented by UniCredit as a growth opportunity for both companies, aimed at further strengthening their competitive position in Italy and creating a banking group capable of playing an active role internationally.

However, in April 2025, the Italian Government exercised its power in the screening of FDI (the so called “golden power”), justifying it as necessary to protect Italy’s national security. To allow the transaction to proceed, the Government imposed a series of stringent conditions: i) the loans-to-deposits ratio applied by BPM and UniCredit in Italy must not be reduced for five years, with the aim of increasing lending to Italian households and small and medium-sized enterprises; ii) the level of the project finance portfolio of BPM and UniCredit in Italy must not be reduced; iii) Anima Holding (a Banco BPM affiliate) must continue to invest in Italian securities; iv) all activities in Russia must cease within nine months from the date of the measure itself (UniCredit is among the few European banks that have maintained a stable presence in Russia).

UniCredit has strongly contested the position of the Italian Government, stressing that no security or public order concerns are at stake, as the transaction involves institutions that have operated stably in Italy for a long time and are fully subject to national and EU law. Consequently, the bank challenged the Government’s decision before the Italian Administrative Court, which annulled the conditions related to the loan-to-deposit ratio and project finance, but confirmed the legitimacy of the request to withdraw from the Russian market. By recognising the – partial – legitimacy of the use of golden power, the Court confirmed that economic security is now regarded as an integral component of national security.

Italy’s golden power regime in finance

The golden power grants the Italian Government the authority to control investments (impose conditions to or block transactions) by non-EU operators in companies active in sectors deemed strategic for national security and public order. Initially, its scope was limited to five sectors – defence, national security, communications, transport and energy.

Over time, the scope of golden power has been broadened, both in terms of sectors considered strategic and the nationality of the investors subjected to review. Since 2020, the golden power has included additional assets and relationships of strategic importance in line with EU Regulation No. 2019/452. Article 4 of the Regulation – the first EU-wide framework for FDI screening – explicitly lists finance, credit and insurance among the sectors to be considered by member states in their FDI screening. Notably, the Italian Government took a step forward, requiring notification not only for acquisitions by non-EU investors, but also for those by EU – and even domestic – entities. Initially adopted as a temporary measure[1] to address the exceptional circumstances of the Covid-19 pandemic, these provisions became permanent as of 1 January 2023, in response to the political and economic repercussions of Russia’s war against Ukraine and to strengthen the protection of strategic companies operating within the national territory.

Several recent cases illustrate how Italy has employed its golden power to safeguard national security. In 2021, for the first time, golden power was applied in the agri-food industry to shield the seed producer Verisem from acquisition by the Chinese-owned agrochemicals giant Syngenta. In 2023, the government imposed specific conditions on the deal between Pirelli and China National Tire and Rubber Corporation, Ltd. in order to protect the strategic asset represented by CYBER sensors embedded in tyres. In 2024, veto power was exercised against the planned joint venture between Manta Aircraft and the Chinese state-owned SAIG, due to potential dual-use implications of the development of civil aircraft prototypes. Notably, all these measures were taken in response to Chinese acquisitions across various sectors.

As far as the Italian banking sector is concerned, instead, in the past few months, a growing number of notable cases of golden power notifications involving only domestic and EU actors can be recalled. On 8 January 2025, Banca Ifis S.p.A. launched a voluntary full tender and exchange offer for all shares of illimity Bank S.p.A.; on 24 January, Monte dei Paschi di Siena S.p.A. initiated a voluntary public exchange offer for all ordinary shares of Mediobanca; and in the following weeks, BPER Banca and Mediobanca made a similar offer, respectively, for Banca Popolare di Sondrio and Banca Generali. In all these instances, the government acknowledged that the notified transactions fell within the scope of golden power but chose not to exercise it – with the sole but highly relevant exception of UniCredit’s offer for Banco BPM.

The European Commission’s role in protecting the internal market

The decision to exercise the golden power in the UniCredit-Banco BPM case is significant for two reasons. First, it marks the first application of the golden power to a sector that, until 2020, was outside its scope. Second, it falls under restrictions initially conceived as temporary but later made permanent, which enable the government to intervene in purely domestic transactions. To an extent, the strong reaction of the European Commission against it was no surprise.

In its 56-page preliminary opinion, the Commission questioned the legality of Italy’s decision under EU law. Berlaymont argued that the conditions imposed by the Government lacked a clear national security justification, noting also that they overlap with the exclusive competence of the European Central Bank as the prudential supervisory authority for significant banks under the Single Supervisory Mechanism. In this framework, any public interest invoked to justify state intervention must be clearly distinct from prudential considerations, so as not to interfere with the ECB’s mandate.

As a consequence, the Italian government’s decision represents a disproportionate restriction on investment, as well as a breach of the free movement of capital and of the freedom of establishment. To reinforce, the Commission also noted that UniCredit’s largest foreign shareholder, BlackRock, holds only 7.4 per cent of UniCredit’s shares. This position echoes the approach adopted in the early 2000s, when the European Commission repeatedly intervened to challenge national measures that violated the fundamental principles of the Single Market. Ahead of a possible formal infringement procedure, the Italian Government, in its formal response to the Commission, reaffirmed its position. Meanwhile, UniCredit decided to withdraw the offer.

The UniCredit case is significant because it signals the Commission’s return to taking a clear stance on a member state’s decision after a long period of silence and may signal a broader, growing trend. For instance, last June, Spain imposed stringent conditions on BBVA’s voluntary public exchange offer for Sabadell. In that case, the European Commission challenged Madrid by opening an infringement procedure over unjustified restrictions on the free movement of capital. Meanwhile, although not exercising its golden power, Germany intervened by expressing a negative opinion on UniCredit’s announcement that it had increased its stake in Commerzbank, defining the approach of the Italian banking group as “uncoordinated and hostile”.

Internal challenges for the EU in a challenging international landscape

The UniCredit dispute highlights how golden power, reinforced in response to shifting geopolitical dynamics, risks being misused for political purposes, with governments acting as market players and actively steering the creation of strong cross-border banking groups. This raises not only the enduring question of its compatibility with EU law, but also issues stemming from the growing fragmentation of national policies and the politicisation of economic governance instruments – both of which now undermine the goal of European financial integration. This debate is especially timely, intersecting with the revision of the Investment Screening Regulation, aimed at harmonising national frameworks, and the wider European efforts on the Capital Markets Union.

As in the early 2000s, the European Commission could once again provide the guidance needed to contain the discretionary drift of member states and their intervention in the market. Yet the present scenario is more complex than two decades ago. Then, the priority was to build the internal market; today, the challenge is to defend it – not only from external shocks, but increasingly from internal pressures. What has not changed is the set of shared values at the heart of the European Union – principles that must be upheld if the European project is to endure. The final outcome will determine whether Brussels can really curb nationalistic tendencies or instead member states will consolidate their discretionary powers.


Federica Marconi is a researcher in the “Multilateralism and global governance” programme at the Istituto Affari Internazionali (IAI).

[1] Not later than 31 December 2020. However, this deadline has been extended by Law-Decree No. 127 of 21 September 2021 (also known as the “Decreto Ristori I”) until 30 June 2021, and by Law-Decree No. 228 of 30 December 2021 (also known as the “Decreto Milleproroghe”) until 31 December 2022.