Berlusconi pushes Italy to the edge, again 29 Sep 2013 Il Cavaliere’s decision to pull his party’s ministers from the coalition government could spook markets, trigger chaotic elections, delay reforms and hurt the country’s fragile recovery. The only silver lining: it could also trigger the long-overdue renewal of Italy’s politics.
Intesa in self-made crisis after skirting big one 27 Sep 2013 Italy’s largest retail bank got out in front of the euro sovereign crisis by raising capital early. Now CEO Enrico Cucchiani may be ousted after a boardroom scrap. Unless Intesa wants to further rile investors, it needs to be similarly decisive in sorting out its governance.
Chrysler impasse needs Fiat to make first move 24 Sep 2013 A year-long shareholder dispute about the value of the U.S. automaker has now led to an IPO filing. Listing would be an expensive waste of time. The sensible road out of this boggy no man’s land is marked “compromise”. Fiat is best placed to crank the process into first gear.
Telefonica set to call the shots in Italy 24 Sep 2013 The Spanish group is raising its stake in the company that controls Telecom Italia. This should break the deadlock over the indebted Italian operator, and prompt a breakup of TI’s Brazilian arm. A sale would help cut debt at TI - and strengthen Telefonica’s position in Brazil.
Italy deserves the markets’ Spanish treatment 11 Sep 2013 The political chaos created by Silvio Berlusconi has pushed Italian bond yields above Spain’s for the first time in over a year. But that’s only part of the problem. Italy is losing ground on reforms and competitiveness. Without a strong government, it will keep declining.
Beware the Italian risk in German elections 9 Sep 2013 Germany’s election is more open than it looks. Merkel’s current coalition might lose its majority. The Social Democrats are loath to enter another alliance with her conservative party. Protracted negotiations may make Berlin look like Rome, paralysing Europe for weeks.
Brussels partly detoxifies Monte dei Paschi rescue 9 Sep 2013 The European Commission is forcing Italy’s third-largest lender to raise over twice the 1 bln euros it had anticipated. MPS’s initial shareholder-friendly bailout sat oddly with Brussels’ new bail-in regime. Now the disparity is less glaring, and nationalisation is more likely.
Italian tax deal shows Berlusconi’s still kicking 29 Aug 2013 The Letta government has struck a deal on Rome’s mansion tax. Berlusconi’s political career may be ending, but his legal wrangles and populist antics threatened the government and rattled markets. Failure to implement serious reform could ruin the country’s weak chances to grow.
Monte dei Paschi rescue tests Europe’s resolve 8 Aug 2013 The European Commission has been sniffy about the Italian lender’s bailout. That’s no surprise, given Brussels is toughening state-aid rules to prevent cushy bailouts. But the Commission faces a tricky balancing act between fixing MPS and causing political trauma in Italy.
Berlusconi verdict weakens Italian reform drive 2 Aug 2013 The former prime minister’s conviction for tax fraud will exacerbate tensions within Rome’s fraught ruling coalition. Yet neither party is ready to face their electorate. That means a crisis isn’t imminent – but the political unity needed for reform is still remote.
Eni’s credit rating shows shifting oil sands 2 Aug 2013 The Africa-focused oil major’s debt sits three notches above Italy’s after S&P’s recent downgrade of the country. If the gap closes, it would probably be due more to Eni’s exposure to its home base’s weak economy than to risky operations in Nigeria and North Africa.
Italy’s problems will stay when Berlusconi is gone 18 Jul 2013 The former prime minister faces his final appeal for a tax-fraud case on July 30. A guilty verdict will be bad news for the main centre-right and centre-left parties: neither one wants new elections. The question is what comes after Berlusconi? The answer may be more of the same.
Italy: fertile ground for bold foreign buyers 10 Jul 2013 Recession, paralysis, corruption, credit squeeze: no wonder Italian M&A is slow. But local firms excel in everything from fashion to engineering. Foreigners could invest in some great businesses - if only they found ways to coax Italy’s ageing entrepreneur-owners to the table.
"Made in Italy, Owned Elsewhere" will have to do 9 Jul 2013 Loro Piana’s sale to LVMH is a cashmere bombshell. With Italy in dire economic shape, its industrialists face existential questions like whether to move HQ or sell out. Italian capitalism needs to be liberalised. The danger is that only the healthy few will have a choice.
Italy still can’t shake off old derivative sins 26 Jun 2013 Rome’s use of financial engineering in the 1990s is known, but news of a possible 8 bln euro loss on pre-euro swaps is still embarrassing. The debt crisis hasn’t fully clarified Italy’s opaque public finances. Lingering obscurity won’t help if Italy has to ask the ECB for help.
Football cleanup won’t hit goal with fans offside 25 Jun 2013 Yet another scandal is shaking up European football. Italian authorities are investigating 41 clubs on suspicion of tax fraud and money laundering. The case highlights the sport’s poor governance and questionable integrity. Unfortunately supporters may not care that much.
Hugo Dixon: Italy’s Letta makes best of bad job 24 Jun 2013 After February’s inconclusive election, it looked like Italy’s dysfunctional political system might drag the country further into the abyss. But new PM Letta is quietly getting on with reform. Sadly, he has a mountain to climb and a political crisis could erupt in the new year.
Salotto Buono’s dismantling hopeful sign for Italy 21 Jun 2013 After 67 years as Italian capitalism’s puppet master, Mediobanca will relinquish its role as a holding company and focus on financial services. Though the bank’s power was already much diminished, an official retreat shows that corporate Italy, if not the state, is reforming.
Eni could be better off holding on to Saipem 19 Jun 2013 The Italian oil major probably wishes it didn’t own 43 pct of Saipem, the struggling oilfield contractor. Ditching the unit was politically tricky before a string of profit warnings. Now, with investor faith in Saipem crumbling, Eni’s least-bad option may be to keep it.
World’s oldest bank limps into 21st century 14 Jun 2013 Monte dei Paschi’s stock jumped after the Italian bank proposed removing the voting rules favouring its controlling foundation. The move will allow the stricken lender to attract new capital, and Brussels to approve state aid. Not that there was much choice.