Hugo Dixon: Confidence tricks for the euro zone 23 Jul 2012 The euro’s crisis of confidence operates at multiple levels. Businesses, bankers, citizens and politicians are losing faith in both the economy and the whole project. That creates multiple vicious spirals, centred on Spain and Italy. But there’s a way to escape the vortex.
Italy turns screws on Sicily with default threat 19 Jul 2012 Mario Monti, the prime minister, says Sicily could go bust and wants the island’s governor to step down. In fact, default seems unlikely. Sicily’s debt is modest, and that of Italy’s regions less serious than Spain’s. But Monti is right to tackle fiscal abuse in the regions.
Valentino makes Permira look not shabby nor chic 12 Jul 2012 Permira’s top-of-the-market acquisition of Hugo Boss and Valentino in 2007 looked like extravagant folly. Five years on, the buyout firm has sold Valentino to the Qatar royal family for a punchy price. That leaves its fashion binge looking respectable, if not glamorous.
MPS capital plan only solves immediate crisis 27 Jun 2012 An extra 1.5 bln euros of state cash will allow the venerable Italian bank to finally pass EU stress tests. But MPS will need yet another rights issue to help pay it all back in three years’ time. Even after savage job cuts and restructuring, its returns will still be below par.
Mario Monti pinned between two comedians 25 Jun 2012 Beppe Grillo, a professional comic and leader of Italy’s second force, wants the country to quit the euro and default on its debts. Silvio Berlusconi is also toying with euroscepticism as he attempts a comeback. This makes it much harder for a technocrat PM to manage the crisis.
Monte dei Paschi faces its moment of truth 22 Jun 2012 The world’s oldest bank will next week explain how it can close a huge capital gap identified by European regulators. Since its foolish takeover of rival Antonveneta in 2007, little has gone right for Italy’s third-largest lender. And there are no obvious solutions to its problems.
Rome has many roads before bailout 14 Jun 2012 Rising yields after the so-called Spanic have sparked talk of an Italian bailout. Given that the euro zone doesn’t have enough money to fund one, Rome’s debt would also need restructuring. Fortunately, it has many lines of defence before that. Unfortunately, none is impregnable.
Generali coup risks one more reason to sell Italy 1 Jun 2012 Shareholders, led by Mediobanca, are seeking to oust the boss of the country’s largest financial institution. Italy could do with a dose of shareholder activism, but this coup may do little to dispel its reputation for intrigue, hardly good for a country in crisis.
Super Mario Bros need a relaunch 31 May 2012 Italy will be next in the firing line if the Spanish and Greek crises worsen. The ECB’s Mario Draghi will then need to ride to the rescue. But, in return, Italian PM Mario Monti will probably be required to inject extra impetus into his reforms.
Agnellis give thumbs down to Italy 30 May 2012 Fiat Industrial is merging with CNH, its U.S. subsidiary, and is set to become a Dutch-domiciled group listed in New York. This may herald a full takeover of Chrysler by Fiat Auto, with its listing moving across the Atlantic too. Italy may complain but it is largely to blame.
Italy’s new off balance sheet wheeze 23 May 2012 Rome is in a bind; arrears to local companies are choking the economy, but funding them upfront could push up the country’s debt and spook markets. So Italy is using banks to front some of the money. The optics are better, even if the benefit for the economy is probably worse.
Italy protests too much over bank downgrades 15 May 2012 The national bank lobby has called a credit-rating downgrade of lenders “an assault against Italy”. True, bigger Italian lenders seem to have enough capital and liquidity. But the real assault could come from rising stocks of their own sovereign debt.
Germany gives lesson in "free lunch" economics 15 May 2012 Strong technology and labour reforms keep making Germany richer - a quarterly 0.5 percent GDP increase is the latest sign. The rest of the world also gains from strong German exports. But trade surpluses bring credit losses and political spats, especially in the euro zone.
Euro zone carry trade has limited shelf life 9 May 2012 Spanish and Italian banks are still loading up on sovereign bonds with cheap ECB loans. There is room to buy more. But local banks can’t fund Madrid and Rome indefinitely, and with funding markets still dysfunctional, money could run out sooner than expected.
Unipol probe may further muzzle Italy powerbrokers 27 Apr 2012 The Italian antitrust agency has halted bidding for Fondiaria, the country’s second largest insurer. Blocking a currently favoured bid from Unipol would be good news for minority investors. But coupled with new boardroom curbs, it could also strike another blow for corporate reform.
IMF’s euro gloom points to right fiscal path 18 Apr 2012 Spain, France and Italy won’t be able to meet their fiscal targets next year, according to the latest IMF forecast. This is a wake-up call for both austerity fundamentalists and insouciant spenders. Fiscal discipline remains a must. But too much, too fast could be lethal.
Ducati could rip it up with VW 16 Apr 2012 The premium motorbike maker would add a little extra machismo to VW’s growing convoy of brands. A mooted $875 mln price tag is appropriately red-blooded, at nearly twice revenue. Cost savings would be limited. But perhaps VW could turbo-charge sales in newer markets.
Italian revival looks more marathon than sprint 11 Apr 2012 Italian PM Mario Monti’s watering down of labour reforms has disappointed industrialists. The compromise isn’t all bad, but it is a missed opportunity to tackle flaws in Italy’s labour market. With many tough reforms still needed, Monti’s retreat gives markets another reason to fret.
Monti may need market backup for labour battle 22 Mar 2012 Labour reforms announced by Italian prime minster Mario Monti have enraged unions and weakened unity within the coalition government. A wave of strikes could rattle confidence, and pressure politicians to dilute reforms in parliament. Bond markets may need to go on strike too.
Vatican bank struggles to be cleansed of past sins 20 Mar 2012 JPMorgan has closed the Holy See’s account due to a lack of transparency. The Vatican is also straining to be admitted to the list of countries that comply with anti-fraud and money laundering rules. It should either close the bank, or come clean about its shady past.