European Commission irritated by Draghi’s banking stress test maneuvers

The European Commission is upset about a letter sent by European Central Bank President Mario Draghi in the summer, to which EL PAÍS has had access, suggesting that rules on state aid for banks be eased if they put at risk the stability of the European financial sector.

One of the conditions Spain's European partners imposed as part of a loan to recapitalize the country's banks was that holders of preferred shares and subordinated bonds issued by nationalized banks such as Bankia were required to accept a haircut on the value of their investments. Draghi fears the imposition of further haircuts could spark an investment flight.

The ECB is due on Wednesday to present the methodology it will use to carry out stress tests on European lenders to determine how their capital would hold up under certain adverse scenarios. Italian officials have been lobbying Brussels - as have France and Germany - to cut their banks some slack because of fears they might fail the tests.

Brussels is concerned that Draghi might have undermined his neutrality by seeming to have lobbied in favor of Italy's banks. The EU commission for competition, headed by EC vice president Joaquín Almunia, acknowledged the existence of the exception to the state aid rules referred to by Draghi. "The concerns of Draghi are legitimate because his objective is for banks to be able to recapitalize quickly with the least amount of noise possible," a European source said. "But now the letter has been leaked, there is a suspicion that what he is trying to do is protect Italian banks."