In a move that may allow Rome to solve its latest banking crisis on its own terms, preliminary approval for an Italian plan to wind down two ailing Veneto-based regional lenders with state money was given by the European Commission on Friday.

Issuing an emergency decree that will effectively remove one its biggest banking headaches by splitting the two lenders’ assets into “good” and “bad” banks, Italy plans to start liquidation proceedings for Banca Popolare di Vicenza and Veneto Banca on Saturday, according to sources.

For losses stemming from the banks’ bad loans, legal risks and restructuring costs, the state is to foot the bulk of the bill even though the country’s top retail bank Intesa Sanpaolo is set to buy the good assets for one euro.

“EU state aid rules allow for the possibility of granting state support in these kind of situations,” the European Commission, which must rule on the use of state money, said in a statement.

It was in constructive discussions with Italian authorities, it added.

“Good progress is being made to find a solution very soon.”

In order to prevent the two lenders from being wound down under European banking rules designed to stop the use of state money in banking crises, the Italian government has been making repeated attempts.

In what would have been a politically unpalatable prospect in the run-up to elections next year, Rome feared that under those rules losses could have been imposed on senior bondholders and large depositors.

Instead, while the cost for taxpayers is likely to be hefty, only junior bondholders and shareholders will be hit under the Italian plan.

While some Italian media reports on Friday said the final bill could be as high as 12 billion euros, one banker said the government would put in 5 billion euros, with the two banks’ soured or risky debts totaling more than 20 billion euros ($22.4 billion).

The conditions for a sale of the banks’ good assets to Intesa would be created by the emergency decree to be approved on Saturday.

“The sale will allow the regular functioning of the banks’ branches on Monday morning,” a source said. in the coming days, the terms of the transaction will be made public, it added.

The process that will lead to them being wound down was set into motion when the European Central Bank said earlier that the two banks are bleeding deposits and are failing or likely to fail. The two banks together have a capital shortfall of 6.4 billion euros.

“The ECB had given the banks time to present capital plans, but the banks had been unable to offer credible solutions going forward,” it said in a statement.

In a deal orchestrated by European authorities, Spain’s Banco Popular POP.MC was rescued by Santander this month and since then pressure on Rome to find a solution for the two Veneto lenders had increased.

To help it take on Popular, Santander is seeking around 7 billion euros of capital from shareholders and in Popular’s case, no state money was used.

A member state is allowed to handle the process under an exception to EU bank rules that allows the use of routine insolvency proceedings with banks not considered systemically important and the Italian plan instead takes advantage that exception.

While at home in Italy, opposition politicians have also criticized the scheme put forward by the government, the plan has also sparked criticism from some European officials who said Italy was being allowed to cut corners.

“Intesa gets a free gift, the state takes on all the bad stuff and the taxpayer pays,” Renato Brunetta, parliamentary leader for former prime minister Silvio Berlusconi’s Forza Italia (Go Italy!) party said on Thursday.

“Did we really need to take so much time to come up with such a rubbish solution?”

(Adapted from Reuters)