LONDON, July 30 (Reuters Breakingviews) - The Italian government’s bargaining hand with respect to its most troubled lender just got weaker. On Friday the European Banking Authority released stress-test results that modelled the impact on lenders’ capital from a severe recession. In a downturn involving a prolonged pandemic, a 3.6% drop in regional GDP until 2023 and “lower for longer” interest rates, state-controlled Banca Monte dei Paschi di Siena’s (BMPS.MI) entire common equity Tier 1 capital would be wiped out. That should strengthen the hand of UniCredit (CRDI.MI) boss Andrea Orcel read more , who is seeking generous state support to take over the stricken lender. Yet other banks cannot be too smug. The industry’s aggregate CET1 ratio under the EBA’s “adverse” scenario was a still-respectable 10% in 2023. But Germany’s Deutsche Bank (DBKGn.DE), France’s Société Générale (SOGN.PA) and Spain’s Banco Sabadell (SABE.MC) would see their fully-loaded ratios drop to a less-comfortable 6.5%-7.5%. If Covid-19 variants force another slump, that may keep shareholders up at night. (By Christopher Thompson) On Twitter http://twitter.com/breakingviews Capital Calls - More concise insights on global finance: “Black Widow” pits superhero against giant read more P&G puts stark number on inflation read more The SEC is finally getting serious on Chinese IPOs read more Qatar dials into Africa’s mobile-money scramble read more NatWest’s cash splash is an investor distraction read more