Cicala Examines Effects of Italy's Proposed Windfall Tax in Law360 Article

09.28.2023

Stinson LLP Partner Cris Cicala authored an article for Law360, "Italy's Bank-Profits Tax Plan May Become Model For Eurozone."

Cicala examines Italy's prime minister and deputy prime minister's proposed one-time windfall tax on bank profits and provides insight as to why the 40% tax has the potential to put Italian banks "squarely in the middle of a dispute between the populist and euroskeptic Italian government" and the European Central Bank (ECB).

"The redistributive nature of the proposal has led many to view the proposed tax as a populist political maneuver to curry favor among Italian voters, positioning Meloni and Salvini's coalition government as the defender of Italians feeling the pinch of rising interest rates," Cicala said.

He details legal challenges and objections to the proposed tax and highlights speculation around the tax generating similar trends across the Eurozone and throughout the United Kingdom. He also provides guidance on what to watch for and how to navigate financial stability moving forward.

"Expect Meloni and Salvini's proposed windfall tax on banks to take a prominent place on both the political and economic stages in the coming weeks. It will pass and then the legal challenges promised by the ECB, Italian banks and bank advocacy groups will begin," Cicala writes. "If this windfall tax helps keep Meloni's coalition government in power, it may only be a matter of time before other European politicians counter central bankers' playbooks with populist moves of their own."

Cicala is a finance attorney with a business operator mindset. He focuses his multifaceted practice on providing international financial institutions and investment funds, corporations, real estate investors and developers, media companies and entrepreneurs with practical and strategic legal advice.

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