The Rome government will impose conditions on a potential merger between Banco BPM and Credit Agricole Italia, according to Economy Minister Giancarlo Giorgetti. Banco BPM is seeking a merger partner after escaping UniCredit’s takeover attempt. Credit Agricole Italia and Monte dei Paschi di Siena are the top options.

Credit Agricole Italia is seen as a more feasible merger partner for Banco BPM due to MPS’s involvement in the takeover of Mediobanca. Giorgetti stated that he would enforce legislation, including golden powers, to protect key assets if the merger proceeds.

Banco BPM CEO Castagna discussed merger options with government officials in Rome. Banco BPM holds 9% of MPS, while Credit Agricole is the largest investor in BPM, which is vital for financing small businesses.

Italy is a significant market for Credit Agricole, especially for asset manager Amundi. Italy and France both have substantial public debt, with large refinancing needs. Italy aims to encourage domestic investment of Italian savings.

Italy has sought to create a third major bank to compete with Intesa and UniCredit by promoting a merger between BPM and MPS. UniCredit’s attempted takeover of BPM disrupted the plan, but the deal eventually fell through.

Read more at Yahoo Finance: Italy to set conditions on any Banco BPM-Credit Agricole deal