Italy

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.

Profumo can’t start Monte dei Paschi M&A spree yet

19 Mar 2012

The man who built UniCredit with a blitz of deals can’t repeat the trick at MPS, which he is now going to chair – at least until its finances are stabilised. Even then, Profumo will need to face down scepticism over past deals and get any plans past the bank’s core investor.

Enel woes reflect euro zone’s new normal

9 Mar 2012

Big cuts to the debt-laden Italian utility’s earnings and payout guidance suggest years of tough going in Spain and Italy. The shares are 40 pct off their 2011 highs, but windfall taxes, slack demand and the sector’s lowest dividend yield mean investors’ pain may not be over yet.

Seat PG bond swap finally dials down debt

7 Mar 2012

Creditors are taking over another overstretched directories publisher. Seat Pagine Gialle’s 1.2 billion euro debt swap will leave private-equity and public shareholders almost nothing. Post-deal gearing looks manageable – provided the Italian firm can reinvent itself online.

Fondiaria saga recalls Italian power-broker heyday

6 Mar 2012

The struggling Italian insurer’s investors have to choose between merging with rival Unipol and a private equity offer led by ex-Capitalia chief Matteo Arpe. Both carry risks. But the benefits of the Unipol deal in particular look skewed to power-brokers rather than shareholders.

Spain replaces Italy as bad boy in euro class

6 Mar 2012

Since August, Italy has been the big troubled euro economy, with higher yields than Spain. But Rome’s borrowing costs are now a touch tighter than Madrid’s. Economics and politics are responsible for the flip. The gap could widen further – at least until Italy’s next elections.

Euro zone crisis over – for now

1 Mar 2012

Italian and Spanish 10-year bond yields have fallen below 5 percent. Cheap money and new governments’ ability to reform have won over markets. But the ECB will be reluctant to help more, Greece and Portugal are still problems – and the whole periphery is mired in recession.