Italy

Alitalia returned to a net profit of 2 million euros ($2.35 million) in the third quarter, Stefano Paleari, one of the commissioners managing the airline, said on Wednesday in a sign that the fortunes of the airline were slowly improving, Reuters reported. Once a symbol of Italy’s post-war economic boom but recently in trouble due to low-cost carriers and high speed trains, Alitalia was put under special administration last year after workers rejected its latest rescue plan.

Giovanni Tria turns 70 on Friday. Whether Italy’s finance minister gets to enjoy his celebrations will probably hinge on events the day before, when he will announce borrowing and spending targets with the potential to send tremors through financial markets and trigger the fury of Brussels.

Mario Draghi said that signals from Italy in recent months that it may flout EU budget rules have driven up borrowing costs for the country’s households and small businesses, in a warning shot as the government prepares its 2019 budget. Without directly criticising the Italian government, the European Central Bank president said that comments ministers had made on straying from previously agreed deficit targets “certainly did have an impact: households and companies are now paying higher rates than before as a result of the statement,” the Financial Times reported.

Italy wants the public debt of all euro zone states to be brought below 60 percent of gross domestic product, via a long-term restructuring underwritten by the European Central Bank, its European Affairs Minister wrote. The proposal was made in a paper posted on the website of Paolo Savona's ministry and sent to the European Commission, the International New York Times reported on a Reuters story.

Italy’s new populist government is facing a difficult decision: How to reconcile its expensive election promises with the reality of the country’s fragile finances. It is a test of whether Europe’s rising antiestablishment parties can bring change to countries still bearing the scars of the Continent’s long economic downturn—or whether the constraints of life in the eurozone will force them to follow policies they long denounced, The Wall Street Journal reported.

Italian prosecutors said on Tuesday the far-right League can repay some 45 million euros ($53 million) it owes the state over the next 75 years, saving the governing party from possible bankruptcy, the International New York Times reported on a Reuters story. A court ruled this month that prosecutors in the northern city of Genoa could seize some 49 million euros from accounts and businesses belonging to the party following a fraud investigation.

Italian nativist politician Matteo Salvini, whose popularity has surged since he became interior minister in June, has hit his first setback. His anti-immigration League party faces possible bankruptcy from a penalty assessed for past corruption. Mr. Salvini’s governing partners, the anticorruption 5 Star Movement, have pressed him in recent days to comply with a court ruling last week that the League must repay €49 million ($57 million) of public funding for election costs stretching back a decade, The Wall Street Journal reported.

Italy’s industrial sector hit a rough patch in July with total industrial output decreasing 1.3 per cent on the year, the first decline since June 2016, according to new data released on Wednesday, the Financial Times reported. Economists polled by Reuters had expected output growth to remain stable, rising at 1.4 per cent. Monthly figures — which are often volatile — showed a 1.8 per cent decrease in output, far more than the 0.4 per cent dip forecast in a Thomson Reuters poll. Italy is not the only eurozone economy suffering a production slump.

Brussels said it has received assurances from the Italian government that it will work to bring down the country’s high level of public debt, in the latest step by Rome to ease EU concerns about its spending plans, the Financial Times reported.

Since Italy’s coalition government took power, its first budget plans have loomed as the likely trigger for a showdown between Rome and Brussels. The anti-establishment Five Star party and anti-migrant League campaigned on a platform of expensive policies such as a flat tax reform and a universal basic income, ambitions that seemed likely to collide with a European Commission deeply nervous about Italy’s vast debt pile, the Financial Times reported.