But now the 48-year-old is facing a fresh threat to her supremacy from an equally powerful force – a silver-haired Italian dealmaker dubbed “Mr Davos” for his golden Rolodex of contacts.
Andrea Orcel, the suave chief executive of Italian bank UniCredit, is attempting an audacious €10bn (£8.5bn) takeover of a smaller rival – Banco BPM – which has rocked the Meloni government and exposed the fragility of the peace within her coalition.
Since the deal was announced last month, Meloni’s government has launched a political fightback in an attempt to scuttle the 61-year plans for the bank, which has 1,400 branches across the wealthy Lombardy and Veneto regions.
Last week, Meloni allies indicated that they may use so-called “golden powers” to veto or reshape his deal, a tool which allows the government to intervene in takeovers which harm the national interest.
But for Meloni, Orcel’s assault already represents a challenge to her authority and threatens to split her two coalition partners, Forza Italia and the Northern League.
Andrea Orcel is attempting an audacious takeover of smaller rival bank Banco BPM - Olivia Harris/Reuters
From Gianni Agnelli to Silvio Berlusconi, Italian financiers have often had the whiphand over prime ministers on business matters.
But Meloni is attempting to upend this convention and call the shots – leading to a pushback from the new breed of Italy’s business elite, such as Orcel, who think they should be in charge.
“Meloni represents a certain side of Italian capitalism and this is a reaction of Italian capitalists towards this Government,” says Leila Simona Talani, a professor at King’s College, London.
“The establishment is not totally aligned with the Meloni government. They are saying you’re not the only one who counts in this country But (Meloni) wants to keep control of who is in charge and who decides. She wants to decide.”
At the heart of the struggle is what Italian banking should look like. Meloni and her allies have developed a different vision to Orcel’s, leading to the stand-off over BPM.
Italy is dominated by two banks – UniCredit and industry leader, Intesa Sanpaolo – but Meloni wants to create a third player by merging BPM and another small lender, Monte dei Paschi (MPS).
The idea is to boost competition in the industry, but such an intervention from Roma is an affront to figures like Orcel, who bestride the banking world like masters of the universe.
Since taking the helm of Unicredit three years ago, the Rome-born banker has emerged as a one-man takeover machine seeking to reshape the finance landscape across Europe.
Last year, he launched a hostile tilt at German lender, Commerzbank, much to the chagrin of Berlin.
Now he is stoking fear and resentment in Rome with BPM, which was formed through a 2017 merger of smaller lenders, Banco Popolare and Banco Poplare di Milano.
White knight
Key to the tension is not only Italy’s banking sector but the future of MPS, the world’s oldest lender and the jewel in Italy’s banking sector.
It has been owned by the Italian government for the past decade after a taxpayer-funded bailout.
Meloni has been reducing Rome’s stake by selling shares in the company to figures such as the billionaire family behind Italy’s EssilorLuxottica group, as well as Francesca Caltagirone, who owns the Messagero newspaper.
Because of the government’s close involvement with MPS, BPM has become a white knight of sorts, and Orcel’s attempt to remove it from the chess board would undercut Meloni’s ambitions.
“The government doesn’t want to be left with Monte de Paschi and not know what to do with it,” says David Grinsztajn, an analyst at Alphavalue.
“Monte de Pasci is not viable on a standalone basis and it wants to solve the issue of Monte de Paschi by merging it with BPM.”
Last month, the government chose to sell a 5pc MPS stake to BPM – giving a foothold for a future merger.
But UniCredit’s BPM bid has effectively pushed the Government into a corner – an aggressive move by Orcel which has pitted him against Meloni.
Also, it is not lost on many that Meloni had reportedly encouraged UniCredit to buy Monte dei Paschi, an offer the famously forthright Orcel rejected.
Coalition split
At the same time as Meloni battles to save MPS, a UniCredit takeover of BPM would trigger political fireworks that could further undermine the coalition government.
Meloni’s Brothers of Italy party is by far the strongest constituent in Italy’s coalition government. However, it relies on support from Matteo Salvini’s Northern League party and Forza Italia, the former party of Berlusconi.
Northern League’s Matteo Salvini has blasted Orcel’s group as a ‘foreign bank’ because less than half its revenues come from Italy - ANGELO CARCONI/EPA-EFE/Shutterstock
UniCredit’s bid has caused tensions in Government because the League is opposed to the deal while Forza supports it.
BPM is vitally important to Italy’s northern region because it extends credit to companies employing thousands of people in an area which also happens to be the League’s stronghold.
The bank, led by Giuseppe Castagna, has warned that a takeover could cost up to 6,000 jobs if it succeeds, harming the League’s political prospects.
BPM’s historical ties to the League “complicates” UniCredit’s proposed takeover, according to Morningstar senior equity analyst, Johann Scholtz.
“BPM emerged from the 2017 merger of Banco Popolare and Banco Poplare di Milano, banks with its roots in the North of Italy, where the League gets most of its support,” he says.
“We think the League also wants to preserve a regional champion bank in the area.”
BPM’s political importance means that Salvini and League politicians have emerged as the leading critics of the deal.
Salvini has blasted Orcel’s group as a “foreign bank” because less than half its revenues come from Italy.
Giancarlo Girogetti, Italy’s finance minister and a League politician, has also stressed Rome’s power to veto and vet bank deals.
“By opposing the takeover bid by UniCredit, Salvini wants to signal that he is the Guardian of the North and the guardian of Northern savings,” says Matteo Bursi of the Istituto Affari Internazionali in Rome.
“I don’t believe that it will create an earthquake within the government, but it will contribute to tensions within the government.”
While the League complains, its coalition partner Forza Italia has ramped up its support for the deal.
The party has recently moved to the centre ground to distinguish itself from Meloni and Salvini, adopting a more pro-European and pro-market liberal stance under the leadership of Antonio Tajani, the Forza leader and Meloni’s deputy.
Tajani said last month that the party had a “duty of not frightening markets with extravagant choices”.
“We are liberals, we are not going to meddle if a bank wants to buy another one, it’s the market that decides,” he said.
“The Brothers of Italy remain neutral because of the fact that they don’t want to scare the financial markets and the free market. The Meloni government has done a lot in the past years in order to create confidence,” Bursi said.
However, with Orcel on the march, she could be forced to back down to preserve her power.
“It could be a message to her that some things you can do, some others you cannot,” said Professor Talani of Orcel’s BPM bid.
“She is really becoming a little bit invasive, she is kind of taking over everything in Italy, or at least she believes so. But she will not be able to stop this.”
