ROME (Reuters). Reuters has seen a draft budget for 2022 that shows Italy’s plans to increase tax incentives to encourage tie-ups within the country’s financial sector.

The program, which is applicable to all companies, but mostly to banks, was an important component of the incentive package Treasury submitted to help sell Monte dei Paschi di Siena (MPS), to UniCredit.

The talks on the merger fell apart Sunday. It was a blow to Italy’s decades-long attempts to reprivatize MPS.

After the negotiations ended, there was uncertainty on the markets about the possibility of incentives being renewed as previously stated by government officials.

Rome’s plans were revealed in the draft to continue tax reliefs until June 2022 instead of December 31 2021.

According to the draft, the budget establishes a new limit for mergers between 500 million euro minimum and 2% current assets cap.

The draft states that lenders will be able tap into the incentives to complete merger procedures in two years after they have purchased a controlling share, as opposed to one year.

Analysts view the tax cuts as a major consolidation driver in the Italian market. More tie-ups will follow Intesa Sanpaolo’s acquisition of UBI (OTC:), the second-healthiest player.