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Italy blocked Safran-Collins deal due to national defence issues -Meloni

ROME (Reuters) - Italy blocked French group Safran's planned $1.8 billion purchase of the flight control systems arm of Collins Aerospace because it could have threatened supplies to national armed forces, Prime Minister Giorgia Meloni said on Wednesday.

Safran said on Monday that Rome had vetoed its acquisition of Microtecnica, Collins Aerospace's Italian subsidiary, using its "golden power" to halt the takeover of what it deems a strategic asset.

The decision was taken to avoid "potential" risks "for the readiness of our armed forces" and "potential interruptions of our logistics chain", Meloni said in Berlin after a meeting with German Chancellor Olaf Scholz.

The alternative of approving the deal subject to conditions would not have adequately protected the national interest, she said, adding that Italy would have "opportunities ... to explain to its allies the reasons for this measure."

Separately, two German government sources said Berlin did not tell Rome to ban the takeover but that it was important to take measures to ensure the continued provision of spare parts for the Eurofighter and Tornado jet fighter programmes.

Speaking in Berlin, Meloni also said that euro zone countries were making progress "on a negotiation that is not easy" concerning the reform of the currency bloc's budget rules, the so-called Stability Pact.

Italy - which has the euro area's second-highest public debt burden after Greece - wants budget discipline targets that "would be possible, I am not saying easy, to meet in the coming years," Meloni said.

The Italian prime minister also said her government was ready to send "next week" to the European Commission a formal notification for the Lufthansa-ITA Airways deal, which needs to be approved by the EU executive.

Meloni said she hoped the Commission could handle the case swiftly.

Lufthansa agreed at the end of May to take a 41% stake in ITA.

Since then, Italy has engaged in talks with European Union competition authorities to secure informal backing before going ahead with a formal notification of the transaction.

(Reporting by Alvise Armellini in Rome; Additional Reporting by Andreas Rinke in Berlin; Editing by Federico Maccioni and Mark Potter)