Seat Pagine Gialle's bonds slumped by a third in the debt markets on Tuesday after the Italian phone directory firm suspended an interest payment just five months after a drawn-out debt restructuring, Reuters reported. Seat PG said its 2011-2013 business plans were under review, as were its 2015 targets, but also said it had the resources to honour upcoming debt maturities. Like other directories firms, including France's PagesJaunes and Yell in the UK, Seat PG has been struggling to reduce debts and fight competition from Internet search giants such as Google.

Monte dei Paschi di Siena said on Sunday it was seeking a financial investor as the political storm over a derivatives scandal at the ailing bank intensified ahead of next month's Italian election, Reuters reported. Italy's third-biggest lender, which needs state loans to stay afloat, this week revealed opaque derivatives trades, conducted between 2006 and 2009, that could cost it some 720 million euros.

Mario Monti, Italy’s prime minister, was forced to offer to recall parliament on Thursday amid questions about his government’s handling of the financial crisis at Monte dei Paschi di Siena and the role of the central bank, the Financial Times reported. Shares in Italy’s third-largest bank by assets, which has requested a second state bailout in four years, have fallen more than 22 per cent in the past few days since revelations five days ago of derivatives transactions that may force the 500-year-old bank to restate hundreds of millions of euros of losses.

An Italian court has declared porcelain maker Richard Ginori 1735 bankrupt, union and company sources said on Monday, potentially thwarting a takeover by a U.S.-led consortium. The sources told Reuters that a Florence court had submitted its decision on Monday, effectively blocking a sale procedure by special administrators appointed to prevent the company going bankrupt. Richard Ginori, which has made fine china tableware for over 270 years, was not available for comment. "We cannot understand why the court took this decision," said one of the sources.

Italian auto maker Fiat SpA formally asked to buy a second tranche of shares in Chrysler Group LLC held by a United Auto Workers' health-care trust that is the U.S. automaker's second-largest holder after Fiat, the Wall Street Journal reported today. Fiat said the second tranche represents an about 3.3 percent stake in Chrysler, the same amount as the first tranche.

Troubled steelmaker Lucchini, Italy's second-largest producer, has requested to be placed under receivership procedures to save it from bankruptcy, Reuters reported on Saturday. The measure, which involve the appointment of an administrator chosen by the government, aims at saving large insolvent companies. "The board hope it will be possible to find a solution for the company's crisis which can value the efforts so far borne by the firm," the steelmaker said in a statement on Dec. 21.

Italian business confidence rose for a second month after a recession eased in the third quarter and the nation's borrowing costs declined, Bloomberg News reported yesterday. The manufacturing-sentiment index increased to 88.9 in December from 88.5 the previous month, Rome-based national statistics institute Istat said yesterday. Italy’s economy shrank 0.2 percent in the three months through September, about a third of the contraction recorded in the previous quarter. Read more.

Former prime minister Silvio Berlusconi said on Tuesday Italy would be forced to leave the euro zone unless the European Central Bank gets more powers to ensure lower borrowing costs, Reuters reported. Berlusconi, who announced this month he will again lead his People of Freedom party (PDL) in a national election expected in February, said on a talk-show on state broadcaster RAI that the ECB should become a lender of last resort for the currency bloc.

As Prime Minister Mario Monti prepares to exit the stage, he has burnished Italy’s image — and his own — abroad, but he is less beloved at home, the International Herald Tribune reported. Italians are irate about higher taxes, while critics say that Mr. Monti failed to carry out the basic structural changes he said were needed, leaving a legacy more of austerity than growth. While Mr.

The European Central Bank's pledge to stand by vulnerable euro zone members will be enough to ensure Italy and Spain find buyers for their bonds at parallel auctions on Thursday, Reuters reported. In Italy, the ECB's bond-buying scheme is seen as a solid enough counterweight to the political tension and market jitters triggered by Prime Minister Mario Monti's weekend announcement of his intention to step down early.