The European Commission will take legal action before the end of the year against Italy over allegations that Antonio Fazio, governor of the Bank of Italy, improperly protected Italian banks from foreign takeovers.

The Commission’s first step towards taking Rome to the European Court of Justice would be to send the Italian government “a letter of formal notice” setting out the Commission’s concerns. Normally countries have two months to respond. “I have not signed the letter yet but I expect to do so before Christmas,” Charlie McCreevy, internal market commissioner, told Reuters on Thursday.