Italy’s mounting pile of debt poses an ongoing hazard to the country and its financial system especially if the economy underperforms, its central bank said in a half-yearly stability assessment, Bloomberg News reported. Just weeks since the government unveiled new projections pointing to an increase in borrowings, officials cited prospects for the public finances as “a risk factor.” That’s arguably stronger language than they used in their two financial stability reports last year.
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The euro zone’s second and third-biggest economies are about to pile on debt again after three years of fixing their pandemic-bloated public finances, the International Monetary Fund said, Bloomberg News reported. Both France and Italy will see borrowings as a percentage of gross domestic product rise in 2024 and then keep creeping up over the coming half decade, the fund said in its World Economic Outlook released in Washington on Tuesday.
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The venture capital arm of Italy's Cassa Depositi e Prestiti (CDP) will invest 1 billion euros ($1.1 billion) over the next five years in artificial intelligence (AI) and cybersecurity, the state lender said on Monday, Reuters reported. The government in March had announced its intention to set up an investment fund to promote projects in the AI sector, backed by CDP, as part of its broader push, as chair of the G7, to focus on the impact of AI on jobs and inequality.
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Dealing with the extensive loan guarantees Italy provided to help businesses through the COVID-19 pandemic and energy crisis is proving complex, hampering efforts to fix some companies' debt problems, restructuring experts said, Reuters reported. Under successive emergency measures since 2020, Italy has extended guarantees on 189 billion euros ($205 billion) of bank loans.
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Telecom Italia SpA expects a windfall of about €1 billion ($1.1 billion) from the Italian government after a Rome appeals court ruled in favor of the one-time monopolist in a legal case dating back to the late 1990s, Bloomberg News reported. The state has been ordered to pay back about €530 million plus interest to the phone carrier for licensing fees the company paid which were not actually due, according to a copy of the ruling seen by Bloomberg.
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French inflation eased below 3% for the first time in 2 1/2 years and Italy reported a lower-than-expected reading, confirming a trend that has tipped the European Central Bank toward cutting interest rates, Bloomberg News reported. Consumer prices in France, the euro area’s second-largest economy, rose 2.4% from a year earlier in March after a 3.2% gain the previous month, statistics agency Insee said. The slowdown was sharper than the 2.8% forecast of economists surveyed by Bloomberg. In Italy, the bloc’s third-largest economy, inflation had already fallen below 2% in October.
The number of people living in poverty in Italy rose in 2023 to its highest level in about a decade, data showed on Monday, despite an economic rebound since COVID-linked restrictions were eased, Reuters reported. Those living in “absolute poverty” — who were unable to buy essential goods and services — rose to 5.75 million, or 9.8% percent of the population, national statistics bureau ISTAT reported. That's up marginally from 9.7% in 2022 and the highest since the current data series began in 2014.
Telecom Italia's business plan for the new company emerging from the sale of the former phone monopoly's fixed line network is sustainable, Italy's Industry Minister Adolfo Urso said on March 14, Reuters reported. Shares in the former phone monopoly plunged last week after TIM unveiled its three-year strategy and outlook for the business emerging after the network sale to U.S. fund KKR, piling pressure on TIM Chief Executive Pietro Labriola.
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UniCredit faces court hearings in Britain and Russia in the second quarter after a Russian energy company sued the Italian bank for failing to honour guarantee payments because of international sanctions, UniCredit said on Tuesday, Reuters reported. Italian lenders Intesa Sanpaolo and UniCredit still have businesses in Russia, as Western sanctions following the Ukraine conflict curtailed the number of potential buyers and Moscow then passed laws that restrict divestments.
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Telecom Italia SpA is planning to reject Italy’s bid of up to €750 million ($805 million) for its submarine cable unit Telecom Italia Sparkle SpA dragging on the sale of a strategic asset for the government, Bloomberg News reported. The company’s board is expected to ask Italy’s Finance Ministry for better terms for the entire unit at a meeting Wednesday. Giorgia Meloni’s government is trying to take over what it views as a particularly strategic asset beyond Italy. Sparkle operates over 600,000 kilometers (373,000 miles) of cables connecting countries including Israel and the US.
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