Italy

Italian Prime Minister Giuseppe Conte hit back at opponents inside and outside his government, denying that he violated lawmakers’ demands by striking a deal on reforms to the European Union’s bailout fund, Bloomberg News reported.

Italy's ruling parties failed to reach an agreement on Friday over a planned reform of the euro zone's bailout fund, two lawmakers said, as Rome frets about the impact the changes could have on the country's massive public debt, the International New York Times reported on a Reuters story. "There are strong critical points in the reform. We continue to work on it," Raphael Raduzzi, a lawmaker for the ruling 5-Star Movement told Reuters at the end of a meeting of top coalition figures including Prime Minister Giuseppe Conte.

Germany has long stood accused of being the main obstacle on the road to complete Europe’s monetary union. Yet, after a constructive proposal from Finance Minister Olaf Scholz over the creation of some form of joint deposit insurance, it is hard to treat Berlin as the grudger-in-chief of the euro region, a Bloomberg View reported. In fact, Italy could soon become a bigger hurdle on the way to a stronger and safer single currency. Italy has traditionally been a strong supporter of the European project.

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.

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.

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.

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.

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.

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.

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.