Italy

Italy just can’t quit its terrible Alitalia habit

15 May 2020

Using the virus as cover, Rome earmarked 3 bln euros for the stricken airline, twice the boost it’s offering to its education system. That adds to 10 bln euros taxpayers wasted on Alitalia since 2008. The EU may declare it unfair state aid. But the cash will have already flown.

The Agnellis move from hunting to hunkering down

13 May 2020

With a planned $9 bln cash windfall from selling PartnerRe and fat dividends from merging Fiat with Peugeot, the Italian billionaire family was set just months ago for a global, diversification shopping spree. Exor is a case study in how quickly the pandemic shifts fortunes.

ArcelorMittal spring clean has dark hint of winter

12 May 2020

Shares in the world’s largest steelmaker slumped after it said it would raise $2 bln of shares and equity-linked debt. Cutting borrowing is prudent with lockdowns sapping demand. The unexpected nature of the move, and partial take-up by the Mittal family, are less reassuring.

Corona Capital: SPAC reversal, Italy, Toilet paper

8 May 2020

Concise views on the pandemic’s corporate and financial fallout: Dan Loeb’s blank-check company tries to nix a deal; Italians warily get back to work; Australian TP panic subsides.

UniCredit gets little reward for virus caution

6 May 2020

Covid-19 provisions and restructuring costs risk erasing the $16 bln Italian bank’s profit this year. CEO Jean Pierre Mustier is being more prudent than his peers, but that is not reflected in a lowly stock price. At least investors stand to gain more when the recovery comes.

Pandemic strengthens Intesa’s hand in M&A battle

5 May 2020

The Covid-19 crisis is clouding the $27 bln bank’s growth prospects. CEO Carlo Messina may struggle to pay dividends he promised in a hostile bid for peer UBI. Still, the worse outlook makes it harder for the target’s shareholders to reject the scale and savings from a merger.

Pandemic stalls Ferrari’s Formula 1 turboboost

4 May 2020

Bans on mass events are disrupting this year’s racing season. That’s bad for the luxury carmaker, which in 2019 made 14% of its revenue from Grand Prix events and branding. While the core auto business should hold up, a lack of action on the tracks leaves growth in the slow lane.

Italy gives glimpse into post-pandemic dealmaking

28 April 2020

Politicians in Rome want to wed gas-grid operator Snam with power network Terna. Creating a 25 bln euro group would offer few cost savings and blur their industrial missions. It’s a sign that governments will want bigger, less-risky, more-diversified “champions” in the future.

UniCredit offers banks some hope on bad debt

22 April 2020

Italy’s top lender expects the pandemic to hike provisions for dud credit to up to 1.2% of loans in 2020. The spike is chunky, but joint central bank and government action mean it’s lower than past crisis peaks. An expected fallback to pre-Covid-19 levels next year is reassuring.

Corona Capital: HCA Healthcare, Kering

21 April 2020

Concise views on the pandemic’s corporate and financial fallout: The virus helps one part of the U.S. healthcare industry, but harms another; and luxury group Kering's Chinese fortunes may depend on an end to Italy's lockdown.

EU virus aid is no panacea for Italy’s debt woes

17 April 2020

The country ravaged by Covid-19 could draw on an EU euro bailout fund to help manage the pandemic. But interest savings look small, unless the ECB also helps. Political resistance to use such funds means Rome probably won’t use the aid until it faces a bond market crisis.

FCA’s big dividend ambitions bruised by pandemic

15 April 2020

Plummeting auto sales triggered by the Covid-19 crisis and idle plants expose carmakers’ acute need for cash. Tapping state aid would alleviate Fiat’s pandemic pain. But that would probably require delaying or reconsidering payouts to cement a planned union with France’s Peugeot.

Wobbly EU banking union gets extra Covid-19 shove

8 April 2020

Italy is boosting its ‘golden powers’ to shield banks hit by a pandemic-led market rout from unwanted takeovers. Germany and France have said they are ready to inject cash in crisis-hit companies. If such plans materialise, EU’s banking union will be even worse than half-baked.

Mr. Whatever It Takes is Italy’s post-corona card

2 April 2020

As ECB chief, Mario Draghi saved the euro in 2012 with monetary policy magic and prevented an Italian default. As Italy crumbles under the cost of a spiralling epidemic, his name has emerged as either the next premier or president. But he shouldn’t rush into either job just yet.

Viewsroom: Lives under lockdown

25 March 2020

From Milan to Mumbai to Manhattan, Breakingviews journalists are staying put to help stop the spread of coronavirus. Editor Rob Cox checks in with columnists in India, where 1.3 bln people are housebound; New York City, the epicenter of the U.S. crisis; and hard-hit Italy.

Corona Capital: Bailout fees, Distressed junk

25 March 2020

Concise views on the pandemic’s corporate and financial fallout: Wall Street brushes off its bailout pitchbooks. And high-yield debt suggests a deluge of defaults.

Covea should be haggling hard with the Agnellis

20 March 2020

The French insurer’s proposed $9 bln purchase of Exor’s reinsurer PartnerRe has gone from dear to ridiculous in a month. Crashing peer valuations, pressure on Agnelli-owned Fiat Chrysler and a shortage of cash buyers give boss Thierry Derez ample room to negotiate a better deal.

Short-selling bans are no cure for virus rout

13 March 2020

A pandemic-induced market crash prompted Spain and Italy to curb trading on some hard-hit local stocks. The measure, also used to protect bank shares in the 2008 crisis, looks rushed and won’t help much. Real panic selling rather than speculation is what’s roiling markets.

Donald Trump is rising risk factor in virus battle

11 March 2020

The U.S. president’s address to the nation sparked more market panic. A $50 bln pledge for small businesses hit by Covid-19 is good, but his speech lacked public-health remedies, was full of mixed messages and focused on a Europe travel ban. He’s missing both diagnosis and cure.

No Dolce Vita: Life inside the Italian lockdown

11 March 2020

A national quarantine prompted by coronavirus threatens the social contacts essential to Italian life, while gut-punching the economy. Italy’s experience also highlights the struggle ageing societies face in fighting epidemics. Breakingviews offers glimpses from the red zone.