Over the weekend, two of Italy's most troubled banks were wound up: The good assets of Veneto Banca and Banca Popolare di Vicenza were taken on by Intesa Sanpaolo, a larger peer, while the bad assets were moved to an underperforming bank to be financed by state funds. Overall, the cost to consolidate the institutions could come out to around 17 billion euros (roughly $19.1 billion) for the Italian government, considerably higher than earlier estimates. More problematic for Europe, it's the second time its new Banking Union rules have been tested in Italy in the space of six months. It's also the second time those rules have been bent for political expediency. The European Union, buoyed by good economic growth and the recent electoral victories of moderate political forces, has turned discussions back toward integration. But if this episode demonstrates anything, it's that Italy will still stifle such ambitions....
