Germany refuses to alter rules which would give Italy EU funds to prop up banks after Brexit vote
German Chancellor Angela Merkel rebuffed on Wednesday suggestions from Italy that EU deficit and banking aid rules be adjusted to take account of its fiscal and financial troubles following the Brexit referendum in Britain.
"I think the stability and growth pact has enough flexibility to work with. Even under the current circumstances. And we just came up with a whole new bunch of regulations regarding the banking union, regarding their bankruptcy and their recapitalisation. It does not make sense to change things every two years. It cost us a lot of energy. These are the first cases where the new rules are executed.
"There is enough leeway in these regulations to serve the specific needs of the member states," Merkel told reporters at the end of a two-day summit of European Union leaders in Brussels, referring to the bloc's rulebook on deficit and debt levels.
Rome wants to prop up Italian banks in response to financial turmoil unleashed by the British referendum. EU rules allow member states to provide financial help to banks only in exceptional cases. Italian officials have also said they plan to seek more flexibility on EU fiscal rules.