Italy

ECB treats Berlusconi like little boy

29 Sep 2011

A letter from Trichet and Draghi in August told Italy’s PM how to run his economy, setting an end-September deadline. The implied carrot was that the ECB would buy Italian bonds. Given that Berlusconi hasn’t done all he was told to, it’s no surprise that bond-buying has dropped off.

UniCredit’s capital options lie eastwards

19 Sep 2011

Since missing the boat on capital raising earlier this year, sovereign concerns have smashed the Italian bank’s share price. Underwriters may only back a rights issue if the euro zone crisis eases. The best option might be to find a deep-pocketed Middle Eastern investor.

Italian mega-tax would be game-changer

13 Sep 2011

Alessandro Profumo, the former UniCredit boss, suggests a one-off wealth tax of 400 billion euros. This would solve Italy’s debt problem, but could also reverse the euro crisis. Italians are wealthy enough to afford it. But Silvio Berlusconi would first need to be turfed out.

ECB may need tough love for Italy

1 Sep 2011

Italian politicians seem to be flip-flopping over austerity measures. The risk is that the final package lacks credibility, or that structural reforms to promote growth are watered down. The ECB must be ready to turn up the heat by cutting back on its bond purchases.

Balanced budget laws are flawed but not useless

16 Aug 2011

Sarkozy and Merkel like them, and they feature in America, too. But politicians often fudge the numbers, or just change the rules. Nonetheless, in reasonably honest systems such laws slow the build-up of deficits. Perhaps as importantly, they also stigmatize bad behavior.

Solar firm’s demise signals gray industry forecast

16 Aug 2011

Onetime investor darling Evergreen Solar, among the first U.S. green energy companies to go public, just went bankrupt, victimized by a global supply glut. Growing Chinese competition and waning European subsidies mean the solar sector will probably get darker before the dawn.

Italy’s imperfect budget faces bumpy ride

15 Aug 2011

There’s mounting public anger at Rome’s accelerated austerity programme, in particular its tax on high earners. Debt market jitters are likely as the measures are debated in coming weeks. Still, it’s hard to see the package being rejected - though it may well be modified.

Split EU regulators weakened by dubious short ban

12 Aug 2011

Without the cover of European unanimity, countries that imposed short-selling curbs have made it look like they have something real to worry about. Bank shares are still gyrating - hardly evidence of a more stable market. Watchdogs risk suffering a hit to credibility.

Italy still vulnerable despite ECB covering fire

9 Aug 2011

The European Central Bank’s bond buying has brought down Italian yields, yet Rome is still in markets’ sights. The government plans to accelerate fiscal measures and labour reform, but real change could take time, and growth may disappoint. Italy cannot afford to delay.

ECB’s bazooka has a limited shelf life

8 Aug 2011

The central bank’s decision to buy Italian and Spanish bonds has calmed investors’ nerves. But the ECB is only buying time until the euro zone governments’ bailout facility is ready to step in. And the repercussions of Friday’s U.S. ratings downgrade could limit future rescues.

Trichet is right to make Italy sweat

4 Aug 2011

The ECB is turning a deaf ear to the Italian finance minister’s suggestion that it buy the country’s bonds. In a further snub, the central bank resumed its bond-buying programme - for Irish and Portuguese securities. Italy must reform before it asks for help.

Italy draws banks into dangerous embrace

3 Aug 2011

As investors shy away from sovereign debt, Italy will rely on banks and insurers to help it through the turmoil. The country’s lenders are well-funded and can always borrow more from the European Central Bank. But until Rome restores confidence, banks will only get weaker.

Italy overtakes Spain as euro zone’s main worry

2 Aug 2011

Yields on Italian bonds are soaring as the political vacuum fuels fears the government won’t be able to implement its fiscal plans. Spain is suffering too. But Madrid is tackling its problems, while Rome is stalling. Given the sheer size of Italy’s debt, that’s a major concern.