Italy

In an effort to conquer the virus, Italy’s government this week imposed drastic quarantine measures that have emptied the piazzas of cities that are cornerstones of European civilisation, the Financial Times reported. Like all museums, Florence’s Uffizi Gallery is closed. No one is throwing coins into Rome’s Trevi fountain. From inside the Vatican, Pope Francis live-streamed his regular Wednesday mass instead of greeting pilgrims on St Peter’s Square.

Telefonica SA and Telecom Italia SpA’s Brazilian units are working together to buy the mobile operations of Oi SA and end years of failed attempts to consolidate the country’s wireless industry, Bloomberg News reported. Telefonica Brasil SA and Tim Participacoes SA said they’ll will hold discussions on a potential joint acquisition of all or part of Oi’s mobile assets, which Bradesco BBI estimates may be worth at least 12 billion reais ($2.6 billion).

In a related story, Bloomberg News reported that Italy is negotiating with banks to provide breaks from debt payments including mortgages as it seeks to soften the impact of a nationwide lockdown to contain the coronavirus. The government is considering unprecedented steps to inject money into companies and ease family debt burdens, Deputy Finance Minister Laura Castelli said in a radio interview. It’s also looking to aid those who experience temporary layoffs, she said, adding that a new decree on economic relief will be announced soon.

The Rome government is considering a state guarantee scheme to support banks offering debt moratoriums to firms and households grappling with the economic fallout from Italy’s coronavirus outbreak, one of the world’s worst, Reuters reported. Deputy Economy Minister Antonio Misiani said in an interview with Radio24 on Monday that the government was discussing the measure with Italy’s central bank. Such a move would address requests by Italian banks, which fear a new surge in problem loans just as they are emerging from a long restructuring to tackle the legacy of previous downturns.

A company affiliated to Gruppo San Donato, Italy’s private healthcare group, has withdrawn from bidding for NMC Health, the Middle East-focused healthcare company, the Financial Times reported. The Italian group has been the only bidder for NMC Health after private equity group KKR ruled out its involvement last month. NMC’s shares have been suspended since the end of February, and the UK’s Financial Conduct Authority has launched a formal investigation into its finances.

Italy's banking lobby is asking European authorities to ease rules on problem loans for at least six months, as a coronavirus outbreak hits the economy and throws the fragile sector's recovery off course, the International New York Times reported on a Reuters story. Europe's worst flare-up of coronavirus is expected to have pushed Italy into a new recession as measures to prevent the spread of the virus cripple economic activity, threatening an increase in the number of bad loans that Italian banks have worked hard to reduce in recent years.

Italy endured its 17th consecutive monthly decline in manufacturing activity in February, adding to signs that the outbreak of the deadly coronavirus is set to plunge the eurozone’s third-biggest economy into another recession, the Financial Times reported. With nearly 1,700 confirmed cases and 34 dead, Italy is home to one of the largest coronavirus outbreaks outside Asia. On Sunday, the Italian government announced plans to inject €3.6bn into the economy, which contracted 0.3 per cent in the final quarter of last year.

Italy has warned that the EU should offer flexibility on its budget targets should the country’s sudden coronavirus outbreak in its industrialised northern regions have a prolonged impact on an economy already teetering on edge of a recession, the Financial Times reported. Ten Italians have died from the virus and the infection count has risen to 322. The majority of cases were clustered in the regions of Lombardy and Veneto, which together make up a third of output for the eurozone’s third-largest economy and about half of its exports.

Italy is facing a rising likelihood of a technical recession in the first quarter of this year as the rapidly worsening coronavirus outbreak threatens to further damage an economy that was already shrinking, the Financial Times reported. The Italian economy contracted 0.3 per cent quarter on quarter in the final three months of 2019, the steepest decline in six years, and the global economic impact of coronavirus could drive a further contraction in the succeeding quarter, said economists. A technical recession is defined as two consecutive quarters of contraction.

A group of UBI Banca investors holding 18% of the Italian bank’s share capital on Monday dismissed Intesa Sanpaolo’s takeover offer as unacceptable, casting doubt on a bid to create an Italian banking champion, Reuters reported. The CAR shareholder pact said that the 4.9 billion euro ($5.3 billion) offer, the biggest banking deal in Europe in a decade, was “hostile, unsolicited and not consistent with UBI Banca’s underlying values”.