Monte dei Paschi di Siena’s attempt to float itself off the rocks with private capital appears doomed and a state-sponsored bailout looks inevitable. The Italian government on Wednesday granted itself the funds for a rescue package. The deed will probably be done by Christmas, with losses imposed on junior bondholders.

It is tempting to think this outcome was inevitable. The crisis at Italy’s third-largest lender has bubbled away for most of 2016 and the bank has a long and grim record of disappointing its backers. Over the past five years, it has raised €8bn in capital but churned out losses of €15bn.

But, turn the clock back just a few months, and there were realistic hopes that recapitalisation by the private sector would succeed. The Siena-based lender was bottom of the class in the eurozone’s regulatory stress tests in the summer but a few Greek banks have proved it is possible to find brave investors willing to take a punt on recovery.

MPS also seemed to have acquired two ingredients it had previously lacked – a credible chief executive and a serious cost-cutting plan. Marco Morelli, a former Bank of America executive, arrived in September and outlined his ambition to cut 2,500 jobs and a quarter of the branches. If recapitalisation could be achieved, said Morelli, MPS would emerge at the end of 2019 with one of the healthiest capital ratios among European banks.

And why not? Italy is not Greece. Half the country is rich. It ought to be possible for a bank founded in 1472 to shuffle off its bad loans, even at depressed prices, overcome its foolish acquisitions from the boom years and regain a profitable niche. The critical sum at stake in the recapitalisation plan – €5bn – was not off the scale and JP Morgan, the Wall Street powerhouse advising MPS, was on hand to round up a few so-called anchor investors.

It has not worked. The immediate reason is that the anchor investors, supposedly from Qatar and China, have got cold feet. Meanwhile, junior bondholders have squealed at being asked to turn their IOUs into equity. In other words, confidence drained away, not helped by MPS’s warning that its levels of liquidity were falling fast.

But the other trigger was the landslide defeat for prime minister Matteo Renzi in the referendum on constitutional reform. That reopened the debate about Italy’s long-term future in the eurozone. Until the elections are held and the political picture clears, investors seem to have decided that Italy is not a place to take a high-risk bet.

January’s planned €13bn recapitalisation of Unicredit should still be safe. Unicredit is bigger, its bad debts are less severe and underwriters are already in place. But Italy’s political class should be alarmed by MPS’s failure to find private-sector friends. Bigger challenges have been overcome during the eurozone’s many crises. This state bailout looks like investors’ vote of little confidence in Italy.

Lily-livered Deloitte’s ridiculous apology

The sins of Serco and G4S, circa 2013, were grave. The companies had been billing the government for placing electronic tags on offenders who were dead or in prison. They were told to engage in “corporate renewal” – in other words, get their houses in order – and they would be banned from bidding for public sector work in the meantime.

The response was reasonable and appeared to have the desired effect. The companies reformed their boards and audit committees to try to ensure that such a scandal could never happen again. Six months later, the bans were lifted, which also seemed roughly right. Outsourcing is designed to save money for the public purse and Serco and G4S, love them or loathe then, are two of the biggest operators in the country. So best to have the duo, in scrubbed-up form one hopes, in the market to keep the bidding competitive.

Now Deloitte has similarly been banned from bidding for central government contracts for six months. Or, rather, the consultant has volunteered for punishment. Has it also ripped off taxpayers for millions through deceit or incompetence?

Not at all. All that has happened is that one of its consultants wrote a two-page internal memo suggesting the government had no plan for Brexit, which is hardly a controversial opinion, and that civil servants are struggling to cope with the extra workload. But Deloitte thinks it needs to apologise for the “unintended disruption ... caused to government” by a leak to the Times. It wants “to put this matter behind us”.

This affair is ridiculous. The partners of Deloitte come across as lily-livered. And Theresa May, in apparently endorsing the six-month ban, appears terrified of criticism. Outsiders will draw a simple conclusion from the colossal over-reaction: the memo was on the money.