— Analysis

  1. Business and economy

    Risks remain of a two speed economy

    by Vincenzo Chierchia

    IT
    24 Exclusive content for IT24

    The threat of deflation seems to have already disappeared. Prices are slowly recovering, as the ECB (which had brought out the “big guns” with quantitative easing) had initially hoped for, but there remain other complex problems to solve. At the top of the list would be for the government to enact expansionary work and investment policies, support and stimuli for businesses and families. With projects aimed at tax ...

  2. Business and economy

    Politics loses its bearings just as the economic picture improves

    by Alberto Orioli

    IT
    24 Exclusive content for IT24

    The state of Italian politics, currently dominated by the contortions within the Democratic Party (PD) in the throes of a split where the return to a proportional system is fuelling ambitions of splinter groups, is shining an anxiety-inducing light on the overall picture of an Italy (apparently) without bearings. This is particularly serious in a moment when the economy is sending new positive signals. Italy's problems are well ...

  3. Business and economy

    Italy's eight years of foot dragging on deregulation

    by Carmine Fotina

    IT
    24 Exclusive content for IT24

    The protest by taxi drivers has driven home the extenuating circumstances of liberalization Italian-style: promises, stressed and then (almost always) deflated. Eight years after a measure requiring an annual law for competition, and seven years after the first reports sent by the Antitrust to the government and Parliament, it's a good time now ahead of the latest decree to take stock of the situation. And it's not exactly ...

  4. Government policies

    Rome and Berlin's differences simmer in the countdown to the EU's 60th anniversary

    by Morya Longo and Andrea Malan

    IT
    24 Exclusive content for IT24

    Behind the historic friendship between Italy and Germany; beyond the perfunctory smiles on official occasions, Rome and Berlin have often been on opposite political fronts for years. On public accounts, with Italy pointing the finger at Germans for their trade surplus and Germany demanding greater severity from Italy on deficit and debt. On banks, with Germany trying to impose a European limit to government bonds in balance sheets, and Italy ...

  5. Politics

    Italy has no time to waste, between domestic choices and Europe's challenges

    by Roberto Napoletano

    IT
    24 Exclusive content for IT24

    Time should be spent well, not wasted. This at least is the value of political stability. Italy has no interest in being involved in European markets’ anxiety and the upcoming elections in the Netherlands, France, and Germany. We should better leave the stage to France’s debt and Marine Le Pen than focus on Italy’s huge debt, heading towards 133% of GDP. Italy is even less interested in scraping by among the political ...

  6. Government policies

    The never-ending story of Italy's half-finished deregulation

    by Carmine Fotina

    IT
    24 Exclusive content for IT24

    If all the best intentions and estimates on deregulation somehow magically became a reality, perhaps Italy would already have resolved, with a stroke of its GDP, all its problems with budget corrections. The repository of documents on public finance is full of generous projections resulting from pro-competition measures that were then implemented only partially or in some cases simply disappeared as if they had dissolved into nothing. The Mario Monti ...

  7. Markets

    Bank rescue law approved by parliament, ball now passes to lenders

    by Davide Colombo and Gianni Trovati

    IT
    24 Exclusive content for IT24

    The €20 billion bank rescue bill was voted into law on Thursday, and now the ball passes to the banks, who want to, or should, request public guarantees for liquidity measures or state intervention for precautionary recapitalization. The attention at this point is focused entirely on Monte del Paschi, which is set to receive a €6.6 billion investment from the government. It will then move to the Veneto banks, for which the CEO ...

  8. Business and economy

    Speed up public investments to spur growth, OECD says

    by Dino Pesole

    IT
    24 Exclusive content for IT24

    Growth, spurred by active public investment, is now a priority. The OECD's report on Italy focuses first and foremost on the absolute urgency of pushing hard to strengthen aggregate demand. The number it's basing that advice on is well known, which doesn't make it any less alarming: from the start of the crisis, which caused a dramatic contraction in GDP—in part because of restrictive budget policies—public investment fell ...

  9. Politics

    An early election could endanger the hard work done so far

    by Alberto Orioli

    IT
    24 Exclusive content for IT24

    Politics, which by default should always pay close attention to social seismographs, should pay attention to some of the green shoots of optimism in Italian society, along with of course the opinions coming from authoritative domestic and international authorities such as the International Monetary Fund, the European Commission, rating agencies and reports by top global financial investment centers. Political uncertainty, the impact of long ...

  10. Business and economy

    The 0.2% budget fix is hardly the real emergency to be solved

    by Guido Gentili

    IT
    24 Exclusive content for IT24

    There are at least two parts in the report by the European Commission that confirmed Italy's growth forecasts (the lowest in Europe, including Greece) which may sound harsh to Rome, where former Prime Minister Matteo Renzi has started a complex review of the ruling Democratic Party. The first paragraph reads: “Political uncertainty and the banking sector's slow adjustment pose downside risks to the growth outlook.” The ...

  11. Business and economy

    The Third Society: a rising wave of the "excluded"

    by Luca Ricolfi

    IT
    24 Exclusive content for IT24

    Until about a decade ago, actually until the explosion of the long crisis that we are still mired in, one could describe Italian society generally as “two societies,” a term attributed to Alberto Asor Rosa (who coined it in distant 1977). On one hand, the vast world of the ‘guaranteed,' made up of public-sector employees or private employees protected by workplace laws and unions. On the other, the society of ...

  12. Markets

    The long tail of NPLs and the profitability challenge

    by Fabio Pavesi

    IT
    24 Exclusive content for IT24

    For Italian banks, at a level of balance sheet results, the hands of the clock have turned back dramatically to an era that had seemed definitively behind us. Last year saw a steep decline in net profitability. Losses of nearly €15 billion accumulated by major banks wiped out, in one fell swoop, a profit increase (that proved to be ephemeral) in 2015, when the banking sector managed to turn in a profit of nearly €6 ...

  13. Markets

    Balance sheet cleanups cost Italian banks €14.8 billion in losses last year

    by Marco Ferrando

    IT
    24 Exclusive content for IT24

    Each of Italy’s big banks has apparently had a good reason to clean up its loan portfolios in the final months of 2016: UniCredit because of the capital increase, Banca Monte dei Paschi di Siena because of the imminent state bailout, Banco BPM because of its merger, and UBI Banca so it to take over the “good banks” resulting from the rescue of four regional lenders at the end of 2015. Italian banks had an extraordinary 2016, when ...

  14. Markets

    Full-year Italian bank earnings show bad loans have stopped growing

    by Alessandro Graziani

    IT
    24 Exclusive content for IT24

    The “cargo hold” of the Italian banking fleet remains flooded by non-performing loans (NPLs) but is no longer taking in water. The flow of fresh impaired loans is returning on average to pre-crisis levels, as shown by the 2016 results being approved by Italy’s largest banks. Two years of timid recovery, after the slowdown of the previous years, were enough to stop the flows of new non-performing loans ...

  15. Markets

    Market instability has reduced the weight of Italian banks' core shareholders

    by Marco Ferrando

    IT
    24 Exclusive content for IT24

    Governance. Low interest rates, rules in continuous flux, extreme volatility. At banks, short-term shareholders now have the upper hand as instability has reduced the weight of the long-term investors that used to control the Italian banking system. “Between regulatory uncertainties and their increasingly difficult situation, banks, at this point, are only fit for hedge funds. Or for institutions more interested in ...

  16. European view

    Europe's election year, and decisions to be made

    by Guido Gentili

    IT
    24 Exclusive content for IT24

    Keep in mind that this is an election year in Europe, and therefore a particularly tense one.Also keep in mind there is the new couple formed by US President Donald Trump and UK Prime ...

  17. European view

    The labor pains of a several-speed Europe

    by Adriana Cerretelli

    IT
    24 Exclusive content for IT24

    The fever of a several-speed Europe has broken out, or maybe better, of its rebirth. On April 25, 2017, Rome could become the stage for a new performance, which could have ...

  18. Markets

    As investors eye France's political, Italy's fragility in the picture

    by Isabella Bufacchi

    IT
    24 Exclusive content for IT24

    A violent “risk-off” wave widened spreads all across the European government bond market yesterday: the sell off hit all govies except the German Bunds, in a typical flight to quality mood with search for safe havens focusing on highly rated short term paper. Italy was not the trigger this time but nevertheless it was the hardest hit. In the midst of turbulence, Italy continues to be viewed as the weak ring of the euro chain: ...

  19. Laws and taxes

    Italy's anti-tax evasion measures start with VAT

    by Giovanni Parente and Cristiano Dell'Oste

    IT
    24 Exclusive content for IT24

    Italy's government intends to use value-added tax (VAT) as the fundamental lever to fight evasion estimated at €40 billion annually, double the average of other European Union countries. The measures being studied (which will not concern an increase in VAT rates, Economy Minister Pier Carlo Padoan has assured) will also be needed to meet the EU’s request to cut Italy’s 2017 budget deficit by 0.2%. To tackle ...

  20. Business and economy

    Frassati hiking trails and Don Bruno's hearty laughter

    by Roberto Napoletano

    IT
    24 Exclusive content for IT24

    Antonello Sica sent me as a gift, from Avellino, a copy of the monumental book he edited with Dante Colli, published by Club Alpino Italiano: L’Italia dei Sentieri Frassati, “The Frassati Trails of Italy.” As I leafed through it, I found myself ‘hiking’ those trails from the environs of Salerno – Sala Consilina – to the mountain peaks of Alto Adige, breathing the purest air throughout; cool ...

  21. Business and economy

    Inflation rises in January the most since September 2013 thanks to the winter freeze

    by Luca Orlando

    IT
    24 Exclusive content for IT24

    First it was production prices, now it's consumer prices. A few days ago the increase showed up in Europe's numbers, now they are showing up in Italy. Inflation could be the main change in 2017's economic scenario, an increase in prices involving the entire continent and that now sees companies being more able to pass hikes in costs along to consumers. In January, consumer prices in Italy grew by 0.2%, in comparison ...

  22. Markets

    EBA's proposed European "bad bank" would have up to €250 billion firepower

    by Luca Davi

    IT
    24 Exclusive content for IT24

    A €200-250 billion fund: this is the size of the European bad bank being sought by the European Banking Authority (EBA). The plan, recently presented by EBA President Andrea Enria, has drawn strong interest from investors, but also some concerns. The project may be still at an early stage, but the details of the proposal to revive the non-performing loan (NPL) market remain unclear. “A EU bad bank is ...

  23. Markets

    Political risk is on the rise in Italy and France: in spite of QE, spreads on government bonds are creeping up

    by Isabella Bufacchi

    IT
    24 Exclusive content for IT24

    Political risk is on the rise in the European sovereign debt markets but the ECB’s QE is making it almost invisible. Yet, it is there. One just has to look for it. Let’s take Italy and France. Both countries are going through political turbulence and the yield spread between Italian 10-year BTPs and German Bunds has recently widened up to 188 bps, its highest level since the start of the Public Sector Purchase Program launched by ...