(ANSA) - Bank of Italy Governor Antonio Fazio showed no sign on Tuesday of giving in to mounting pressure to resign over a bank takeover scandal. Fazio met with Cabinet Undersecretary Gianni Letta, one of the closest aides of Premier Silvio Berlusconi, who on Monday expressed tacit support for Economy Minister Domenico Siniscalco's stance that the governor should quit.
Luigi Grillo, a senator with Berlusconi's Forza Italia party and a firm ally of Fazio, said the meeting between the governor and Letta had led to "no important developments." Grillo described the meeting as "cordial" and "constructive". But Fazio's determination to remain where he is has left
him increasingly isolated.
Siniscalco and several other ministers have publicly urged Fazio to resign while one of the governor's staunchest allies, the populist government party the Northern League, has toned down its support for the central bank chief.
The economy minister and Fazio are both due to take part in a meeting of European Union finance ministers and central bank governors in England on Friday and Saturday. Sources close to Dutch Finance Minister Gerrit Zalm, whose country Fazio is accused of treating unfairly in his handling of the takeover operation, told ANSA that the issue would be raised at the meeting.
"The minister will discuss the problem and Zalm will give his full support to the position and initiatives taken by his Italian colleague Siniscalco," the sources said. "Many finance ministers have formed clear opinions about the issue and they will certainly express them," they said.
Fazio, who enjoys an open-ended mandate, is accused of abusing his power by favouring an Italian bank over a Dutch bank in a takeover tussle. There have been widespread calls for his resignation, with both the centre-left opposition and much of the ruling centre-right coalition appearing to favour the governor's departure.
But Fazio has refused to go, claiming he did nothing illegal.
The government has been under pressure to act quickly to prevent a further loss of credibility in international financial circles. Siniscalco said this weekend that the government had expected Fazio to resign in the wake of its agreement last Friday on a series of reforms aimed at curbing the powers of the central bank governor.
He also threatened to initiate steps "within the institutional framework" against Fazio if the governor refused to budge.
The Bank of Italy reforms, which have yet to be approved by parliament, introduce a seven-year, non-renewable mandate for the governor but they would only be applied to Fazio's successor. They do not include measures to cover the transitional period.
