Italy

Brussels has warned France and Italy that they are running stubbornly high levels of public debt, meaning their future budgets risk breaching EU rules and alarming investors, the Financial Times reported. The European Commission on Wednesday published its opinion on the 2020 draft spending plans of all eurozone member states.

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Italy’s fractious government may try to delay an agreed-upon plan to overhaul Europe’s bailout fund, throwing efforts to shore up the institutional set-up of the euro area into disarray, Bloomberg News reported. Prime Minister Giuseppe Conte, under pressure from one of his government’s coalition partners, the Five Star Movement, may ask European Union leaders to postpone a final sign-off on the reform at a December 12-13 summit, according to an official familiar with the matter.

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The companies involved in trying to save Alitalia SpA got cold feet before a crucial deadline, throwing the mess back into the government’s hands. Ferrovie dello Stato Italiane SpA, the railway operator leading the effort to find a solution, said Wednesday that conditions aren’t in place to form a consortium meant to save the national flag carrier from liquidation, Bloomberg News reported. This follows a similar statement Tuesday by the Benetton family’s Atlantia SpA. A third potential partner, Deutsche Lufthansa AG, isn’t ready to commit equity, FS Italiane said.

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Proposals to reform the euro zone’s bailout fund are creating a political storm in Italy, where parties and institutions are battling over whether Rome should try to block the reform at the EU level, Reuters reported. A draft of the reform was agreed by euro zone finance ministers in June and is due to be finalised by leaders next month, but senior Italian officials, including its central bank chief, have warned some measures are financially dangerous.

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Italy’s Central Bank’s governor, Ignazio Visco, said on Friday that he favours reforming the European Stability Mechanism (ESM) but without triggering market panic, New Europe reported. The euro zone’s bailout fund has been designed as a lender of last resort for the 19-member Eurozone. However, the Italian government fears that widening the scope of the ESM’s mandate to include debt restructuring could trigger a sudden rise of sovereign rates rise for the southern periphery.

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Greece has lost the dubious distinction of being the riskiest government borrower in the eurozone after its bond yields dipped below Italy’s for the first time since 2008, the Financial Times reported. Greek bonds have staged a powerful rally this year as investors hungry for yields have snapped up debt from former euro area crisis spots — a trend that gained further momentum after Standard & Poor’s upgraded Athens’ credit rating to BB- late last month.

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Italy has warned that a German proposal to complete the EU’s banking union would harm the competitiveness of the bloc’s banks, in comments heralding complex negotiations over Europe’s most ambitious integration project since the creation of the single currency, the Financial Times reported. Speaking on the margins of a gathering of eurozone finance ministers in Brussels, Roberto Gualtieri took issue with a key part of bank regulation plans laid out by his German counterpart this week in the Financial Times.

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The European Union's euro economy commissioner Valdis Dombrovskis said on Tuesday that Brussels was not considering asking for changes to Italy's 2020 budget, the International New York Times reported on a Reuters story. Under EU regulations, the European Commission can force countries to amend their budgetary plans if they are found to be in serious breach of fiscal rules. Such a request would be made by the end of October, if at all.

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Italy’s troubled fashion house Roberto Cavalli said on Tuesday a court had approved a debt restructuring agreement needed for its sale to Dubai’s Vision Investment Company, a group owned by the founder of Damac Properties Group, Reuters reported. Italian private equity firm Clessidra took over 90% of the label from its founder in 2015, in a deal that valued the company at about 390 million euros ($433.10 million), sources said at the time. But the new owner was unable to turn around the Italian brand despite appointing a new CEO and a new designer.

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Italy wants to shield Monte dei Paschi from bad loan losses as it prepares the bailed-out bank for a sale, but faces resistance from European Union competition authorities, two sources close to the matter said, Reuters reported. Italy’s Treasury has a year-end deadline to present an outline of its strategy for getting out of the world’s oldest bank, which was at the forefront of Italy’s banking crisis until a 2017 state bailout was cleared by Brussels.

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