European Competition Commissioner Joaquin Almunia would discuss with Italy's Economy Minister regarding a state bailout of Italian bank Monte dei Paschi di Siena. The bailout fund would require EU approval, a source that was close to the matter said.

Almunia would meet the Economy Minister on Saturday and discuss a proposed bailout for the financial lender. On Friday, a source who asked not to be named said, "It is in the nature of things that they should talk about Monte Paschi."

Earlier on Friday, Almunia said that he would arrange a meeting with Fabrizio Saccomanni on Saturday. The agenda for the meeting would be on various matters, said Almunia who refused to give direct comment when asked about the Monte dei Paschi proposed bailout.

This year, Monte Paschi had received EUR4.1 billion state bailout to plug a shortfall in capital. The bailout was given provided that the financial institution would toughen its restructuring plan prior approval of the state aid.