EU offers Italy migrant help, cautions private rescuers

The EU executive offered Italy more funding on Tuesday to help deal with Mediterranean migrants and said private rescue boats working off Libya should review their operations to avoid encouraging people to take to sea. The European Commission announced 35 million euros ($40 million) in extra cash for Rome in response to Italian demands that its neighbors share more of the burden of handling thousands of people coming by boat every week. It also set out a list of other measures for EU ministers to discuss on Thursday.

Among the proposals was that Italy draft a code of conduct for non-governmental organizations (NGOs) running rescue services off Libya. Frans Timmermans, the Commission's deputy head, told reporters after the commissioners' weekly meeting, that this was in part because their activities might be a "pull factor" -- encouraging people to risk their lives in flimsy dinghies in the hope of being picked up and then ferried over to Italy.

The Commission plan calls for beefing up Libya's coastal rescue services -- something Europeans hope may curb the number of people picked up close to shore by international charities. Despite criticism of abuses by coastguards employed by Libya's shaky, U.N.-backed government, European officials argue that better local rescue services would mean more migrants being taken back to Libya or perhaps to neighboring Tunisia or Egypt.

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Italy summons Austria envoy over border controls

Italy has summoned Austria's ambassador after Vienna said it would likely set up strict controls to stop migrants and refugees from passing the border between the two countries. Austrian ambassador Rene Pollitzer was called to the Italian foreign ministry's headquarters in Rome on Tuesday "following the Austrian government's statement about deploying troops to the Brenner (pass)", the ministry said in a statement.

Hans Peter Doskozil, the Austian defence minister, was quoted on Monday saying his country would "very soon" impose border checks and deploy soldiers on its frontier with Italy if the influx of migrants across the Mediterranean does not slow. "I expect that very soon border controls will be activated and that an assistance deployment (by the military) will be requested," he told the online edition of the Krone daily newspaper.

He was cited as saying that this move was "indispensable if the inflow into Italy does not ease". The newspaper said that 750 soldiers were  ready for deployment within 72 hours, and that four armoured vehicles had already been sent to the border area. 

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Italy rescue plan for troubled bank gets EU approval

Italy's finance minister said Tuesday the plan to restructure the struggling bank Monte dei Paschi di Siena will provide "a credible future" for the institution, while ensuring stability to the Italian banking sector. Pier Carlo Padoan made the comments after the European Union's executive approved Italy's plans to inject 5.4 billion euros ($6 billion) into the world's oldest bank as part of a five-year restructuring plan that the bank's management will outline to investors on Wednesday.

Italy's banking system has been weighed down by a heavy load of bad loans due to a prolonged crisis in the eurozone's third-largest economy coupled with management issues. Besides the Monte dei Paschi rescue, Padoan has been ushering through a plan to save two cooperative banks in the productive northern Veneto region, where account holders have lost billions of euros. The Commission cleared the Monte dei Paschi capital injection only following the contribution of 4.3 billion euros from the bank's shareholders and junior creditors, as required by EU rules meant to minimize the cost of bailouts for taxpayers.

Once the operation is complete, the Italian government will hold a 70 percent stake in the bank. Padoan said he expected that Italy will be repaid its investment in full, with some returns, although he didn't specify by when and how much. "The rescue is an extremely important element for the bank and the Italian banking system, and another sign of a turnaround after the agreement last week on the Veneto banks," Padoan told a press conference. "It is a plan that provides certainty and a sustainable future to the bank that will have a very important capital level." The capital injection is intended to give the bank a buffer in case of worsening economic conditions. The restructuring includes moving more than 26 billion euros in soured loans off its balance sheets, according to the EU Commission.

Commission Vice President Valdis Dombrovskis said the capital injection "should protect financial stability in Europe and limit the burden on taxpayers." Padoan also expressed confidence that the Italian parliament would approve the decree to save the two Veneto banks.