Cassa Depositi e Prestiti (CDP), Italy's state investment bank and sovereign wealth fund, has escalated its clash with Euronext over the governance of Borsa Italiana and MTS, invoking recent regulatory findings that paint a critical assessment of the Italian stock exchange's board as "inert" and systematically non-compliant. The dispute centers on how leadership positions at these strategic financial infrastructures should be filled—a technical debate with profound implications for Italy's sovereign debt market and the balance of power within Europe's largest exchange federation.
Why This Matters
• Regulatory red flags: Italy's market watchdog Consob found "repeated and systematic violations" of governance rules at Borsa Italiana, describing the board as having "passively abdicated" its responsibilities.
• Systemic infrastructure at stake: MTS handles trading of Italian government bonds—a €2.8 trillion market critical to state financing and economic stability.
• Golden power on the table: The Italian government retains legal authority to veto or impose conditions on leadership appointments—an exceptional regulatory authority previously used during the 2020 sale to Euronext.
• Legal battle escalating: CDP has launched parallel proceedings in Amsterdam and Milan; a Dutch court ruling could take 12 months, while Italian courts already rejected an emergency injunction in May 2024.
The Core Dispute: Automatic Renewal vs. Competitive Selection
At the heart of the standoff lies a contractual interpretation issue. When Euronext acquired Borsa Italiana from the London Stock Exchange Group in 2021, it signed a Transaction Cooperation Agreement with CDP (8.1% shareholder in Euronext) and Intesa Sanpaolo. That pact established procedures for appointing senior leaders at the Italian market entities.
CDP's position: Every mandate renewal—including for Borsa Italiana CEO Fabrizio Testa, reappointed in May 2024—should trigger a formal competitive selection process to ensure the roles remain "contestable" and evaluated on merit.
Euronext's interpretation: The procedure applies only when a position becomes "vacant"—meaning an unexpected departure or termination during the first term, not a routine renewal at expiry.
Dario Scannapieco, CDP's chief executive, told a parliamentary banking inquiry this week that the distinction is deliberate. He pointed to a separate clause in the same agreement governing the nomination of Euronext's Supervisory Board president, where the contract explicitly limits the selection procedure to mid-term vacancies. "Where the parties wanted an exception, they wrote it," Scannapieco said. "For Borsa and MTS directors, that exception doesn't exist—a deliberate choice."
What Consob Found: A Board That Surrendered Authority
Scannapieco bolstered CDP's case by referencing recent inspection reports from Consob, Italy's securities regulator. The watchdog documented what it termed a "repeated and systematic violation of corporate governance rules" at Borsa Italiana, characterizing the board as a management body that was "totally inert" and had "passively abdicated its competence."
Specific findings include:
• Budget approvals treated as rubber stamps for decisions already taken at Euronext's Amsterdam headquarters, with inadequate information provided to Italian directors.
• No board discussion of a €1.8 billion debt pushdown—a significant financial restructuring that shifted acquisition-related debt onto the Italian subsidiary's balance sheet.
• Tariff-setting authority stripped from the local director-general, with the CEO reduced to communicating decisions made elsewhere.
• Externalized control functions managed under unclear rules with superficial verification, and compensation approved without proper documentation.
Fabrizio Testa, Borsa Italiana's CEO, acknowledged the governance shortcomings but emphasized they did not affect operational or regulated activities that could harm the market or investors. He said the company chose "the path of remedies" rather than contesting the findings.
Impact on Residents and Investors
For anyone in Italy with exposure to domestic equities, ETFs tracking Italian indices, or government bonds, the governance battle carries tangible risks and opportunities:
Market stability concerns: A protracted legal fight or abrupt leadership change could introduce uncertainty into MTS operations, potentially widening spreads on Italian sovereign debt—directly impacting borrowing costs for the state and yields for bondholders. Residents holding Italian government bonds should monitor BTP spreads (the premium Italy pays to borrow compared to Germany) as a key indicator; elevated spreads signal market concern about Italian financial infrastructure reliability.
Listing competitiveness: Weak governance at Borsa Italiana may drive Italian companies to seek primary listings in Paris, Frankfurt, or Amsterdam. The Ministry of Foreign Affairs has flagged this risk, with Foreign Minister Antonio Tajani in 2025 signaling readiness to invoke golden power to preserve Italy's market autonomy. For individual investors, this could mean reduced liquidity and higher trading costs if Italian equities migrate to foreign exchanges.
Investor confidence: Consob's findings suggest that decision-making authority has migrated to Euronext's Paris-Amsterdam axis, raising questions about whether Italian market infrastructure still serves national interests or functions primarily as a regional node in a French-led federation. Any resident with Italian equity holdings may wish to discuss with a financial advisor whether portfolio concentration in Italian-listed stocks remains appropriate, particularly given the potential for leadership instability.
Regulatory oversight: The dispute may prompt stricter oversight of cross-border exchange mergers, potentially influencing how future consolidation in European capital markets is structured and governed.
The Golden Power Wild Card
Alessandro Tonetti, CDP's chief legal officer, reminded lawmakers that golden power—the government's authority to veto or condition strategic transactions—remains available for appointments at Borsa Italiana and MTS. "It is a prerogative of the government," Tonetti said. "The legal framework allows the government to exercise it, as it has in the past."
Italy has invoked or threatened golden power on Borsa Italiana before:
• 2019: After Hong Kong Exchanges attempted to acquire the London Stock Exchange (then owner of Borsa Italiana), Rome rushed through a decree making golden power immediately applicable to financial market infrastructure.
• 2020: Then-Finance Minister Roberto Gualtieri signaled readiness to use the tool during the sale process, steering LSE toward the Euronext-CDP-Intesa consortium rather than rival bidders.
• 2025: Foreign Minister Tajani publicly advocated invoking golden power to prevent what he described as the risk of Italian firms and ETFs migrating to other European venues.
The government has not yet acted in the current dispute, but Tonetti's testimony signals that the option remains on the table if the legal proceedings fail to produce a governance structure Rome considers adequate.
Room for Compromise?
Despite the legal skirmishing, Scannapieco expressed optimism that a negotiated solution is possible. "I believe there is room in terms of governance to find a synthesis," he told the parliamentary commission. He emphasized that the dispute is "not a fight between shareholders over a seat, nor between Italy and France, nor resistance to a European project"—but simply a matter of ensuring robust governance at systemically important institutions.
He argued that requiring competitive evaluations for leadership renewals does not equate to instability or managerial interference. "Contestability is not instability. It is a condition of quality governance," Scannapieco said. "This procedure is not about imposing 'CDP's man.' It's about ensuring that the best candidates lead critical infrastructure."
Euronext CEO Stéphane Boujnah has defended Testa's reconfirmation by citing Borsa Italiana's 56% revenue growth since 2020 and its elevated role within the pan-European group. Euronext has positioned Italy as a key operational hub, with local talent assuming group-wide responsibilities—a federalist model intended to balance national identities with continental scale.
What Happens Next
The legal calendar offers two key dates:
• Amsterdam proceedings: CDP's main case in the Dutch courts, challenging the validity of Testa's reappointment and seeking to enforce the contested selection procedure, is expected to take approximately 12 months to resolve.
• Milan litigation: After an Italian judge rejected an emergency injunction in May 2024, CDP continues a separate action in Italy, though its prospects are uncertain given the initial setback.
Meanwhile, Borsa Italiana's board—renewed on May 5, 2024, with Testa confirmed for a new three-year term—continues operating under the current leadership structure. Consob's ongoing monitoring will test whether the promised governance "remedies" materialize or whether the watchdog escalates enforcement.
The outcome will set a precedent for how national interests are protected within cross-border European financial groups—an issue likely to resurface as the European Union pursues deeper capital markets integration. For Italy, the stakes extend beyond corporate governance: MTS is the plumbing of sovereign debt issuance, and any perception that Rome lacks influence over its operations could, in a crisis, translate into measurably higher financing costs for taxpayers.
Scannapieco's framing—that contestability strengthens rather than weakens governance—will be tested by whether Euronext accepts a process it initially resisted, or whether the Italian state ultimately exercises its exceptional regulatory authority to impose its preferred structure by decree.
