ROME –  The head of Italy's banking association resigned Thursday to protest a new government measure to cut lenders' commissions, as banks became the latest industry group to stand up against Prime Minister Mario Monti's efforts to free up Italy's economy to wider competition.
The measure to reduce commissions on credit lines is part of a wide-ranging bill aimed at liberalizing various sectors of the Italy's economy in order to reignite the country's sluggish economic growth. But Giuseppe Mussari, head of the banking association ABI, warned that it could affect the lenders' credit activities and hit earnings. It was unclear whether ABI's executive board would accept Mr. Mussari's resignation.
"This [the measure] will hit our revenues" and, as a result, will hurt bank credit policy and, possibly, agreements with labor unions over work contracts," Mr. Mussari told a news conference in Rome.
The government's liberalization bill--which was approved in the Senate and now needs the green light from the lower house of Parliament--has been met with wide opposition. Lawyers and notaries are up in arms over measures that would lower minimum fees; pharmacies have protested against new rules that would allow more competitors to set up shop in any given geographical area, and taxi drivers have been among the most vocal critics of measures aimed at introducing more competition.
During the news conference, Mr. Mussari praised the work of Mr. Monti's technocrat government thus far. He said the government's recent pension overhaul and other moves to encourage economic growth have led to a reduction in the spread between 10-year Italian government bonds and German ones.
"This is leading to a return to normality," Mr. Mussari said, recalling last year's record-high rise in the cost of government debt to 7%.
The return toward normal credit conditions has also been helped by European Central Bank's EUR529.5 billion in cheap, three-year loans, made available on Wednesday, Mr. Mussari added.
He said the ECB's long-term refinancing operation of December was mainly used by Italian banks to fund their expiring debt, while the new loans are expected to be used to offer credit.
Yet Mr. Mussari said he hoped Mr. Monti's government would backtrack on its decision to raise credit line commissions.
"We aren't the enemy of companies and families; on the contrary, we support them with credit," said Mussari.