Italy

Italy posted firm economic growth of 3.7% last year but the budget deficit far exceeded official forecasts due to the cost of tax incentives for green buildings, national statistics bureau ISTAT reported on Wednesday, Reuters reported. Growth slowed from 7.0% (upwardly revised from 6.7%) in 2021 but it was in line with the government's most recent projection, as the euro zone's third largest economy held up better than expected during the first three quarters.

Italy is close to clinching a deal with European Union competition authorities to reintroduce a scheme under which the state provides guarantees to help banks offload bad loans, Reuters reported. Rome has been working to renew the "GACS" scheme, which expired in June, while also tightening the terms under which the state provides guarantees to investors who buy bad bank loans repackaged as securities. Discussions with Brussels are at a very advanced stage and the terms have been for the most part agreed, the four sources briefed on the matter told Reuters.

Deutsche Lufthansa AG said it aims to buy a minority stake in ITA Airways, seeking to advance an industry consolidation that would give the German airline a stronger foothold in a major European aviation market, Bloomberg News. reported. The German carrier didn’t disclose financial details, or lay out the size of the stake it wishes to buy in the successor of Alitalia SpA. Lufthansa wants to buy as much as 40% of ITA in an initial step and subject to negotiations.

Italian Economy Minister Giancarlo Giorgetti on Monday called for a common European Union approach to support competitiveness and protect strategic production, in response to the massive subsidies in the United States' Inflation Reduction Act (IRA), Reuters reported. The EU fears that the $430 billion IRA scheme, with its generous tax breaks for domestic production of energy sector components, may lure away EU businesses and disadvantage European companies, from car manufacturers to makers of green technology.

Italy is set to toughen regulation of digital assets and expand taxation on crypto trading from 2023, following similar moves by countries such as Portugal, Bloomberg News reported. A provision in the country’s proposed 2023 budget plans to extend a 26% levy on capital gains to digital assets for profits larger than 2,000 euros ($2,062.3). Digital coins and tokens so far have been treated as foreign currency by Italy’s tax authorities, which implied a lower taxation.

Italy's new right-wing government plans to announce some 30 billion euros in new spending on Monday in a budget for next year, mainly focused on curbing the impact of high energy prices while postponing some of its most lavish election promises, Reuters reported. The continued energy crisis, triggered by Russia's invasion of Ukraine, means Prime Minister Giorgia Meloni and her allies will not be able to make good on their more extravagant electoral campaign promises, including swingeing tax cuts. "We won't be able to do everything, all at once.

Italy’s Prime Minister Giorgia Meloni is working on a new aid package worth as much as €9.6 billion ($9.6 billion) to help families and businesses through the end of the year without widening the country’s deficit, Bloomberg News reported. The support being devised by the new premier, whose right-wing government was sworn in this week, will show initial continuity with the fiscal prudence of predecessor Mario Draghi before she then probably needs to resort to more borrowing in 2023.

Italy is considering adjusting the way it evaluates the primary dealers responsible for trading its debt in order to incentivise them to trade at tighter bid-ask spreads, its debt management cheif said on Tuesday, Reuters reported. Davide Iacovoni, director general of public debt at the economy and finance ministry, said that there were a number of things Italy was doing to improve liquidity in its debt markets, including repo market action and liability management.

Enel is discussing with a pool of Italian banks to secure a credit line, worth up to 16 billion euros ($15.7 billion) to support Italy's biggest utility, Reuters reported. The facility would have a 70% guarantee from Italy's credit export agency SACE under a state-guarantee scheme to help Italian companies affected by surging energy prices, source added. Read more.

Monte dei Paschi di Siena's management and Italian Treasury officials are ready to revive talks with potential buyers once the world's oldest bank completes a 2.5 billion euro ($2.46 billion) share sale next month, Reuters reported. Italy has years to cut the state's 64% stake in Monte dei Paschi (MPS) under a deal with the European Union, but the Treasury is not expected to sit idle for long. Rome failed to meet an initial EU deadline when talks to sell MPS to UniCredit collapsed a year ago.