HispanicBusiness

The European Commission has temporarily approved a $5.1-billion (3.9-billion-euro) injection of state aid for Italy's third-largest bank, Monte dei Paschi di Siena.

The recapitalization would allow the ailing bank to meet European Banking Authority recommendations in order to improve its financial stability, the EU's executive announced Monday.

As a condition however, it said the bank had to submit a restructuring plan in the next six months.

The aid would give Monte dei Paschi a temporary buffer against sovereign risk holdings, the commission said.

The world's oldest bank has been hard hit by the eurozone debt crisis because of its exposure to Italian government bonds, and posted a net loss of 4.7 billion euros in 2011.

It plans to sell off corporate units, close branches and shed up to 4,600 of its 33,000 staff.