Italian Bank-Tax Confusion Shows Flaws in Meloni’s Coalition (1)

Italy’s banks are paying the price for Prime Minister Giorgia Meloni’s need to cater to the more populist elements in her right-wing coalition.

The latest pact between Meloni and Deputy Premier Matteo Salvini, on a surprise 40% tax on bank earnings which rocked markets, was discussed Sunday night, according to people familiar with the issue. The setting: a dinner of Fiorentina steak and Chianti wine with their partners near the Tuscan coast.

The last-minute decision meant that the policy was full of holes when it was announced by Salvini 24 hours later. Finance ministry officials spent Tuesday ...