Italy

Not so long ago a document as radical as the draft Italian coalition program that surfaced on Tuesday night would have sent the markets into meltdown, The Wall Street Journal reported. It revealed that the 5 Star Movement and the League were still discussing this week proposals that included a demand that the European Central Bank cancel €250 billion ($297 billion) of Italian government debt.

Banca Monte dei Paschi di Siena SpA made progress toward a turnaround after its Italian state rescue, relying on cost cuts and lower bad-debt provisions to swing to an unexpected profit, Bloomberg News reported. The stock rose the most since November. First quarter net income at the Siena-based lender totaled 188 million euros ($224 million) compared with a 169 million-euro loss a year earlier. That beat the average analyst estimate of a 40.5 million-euro loss.

UniCredit SpA Chief Executive Officer Jean Pierre Mustier is ramping up cost cuts and improving asset quality to keep his promise of building a leading pan-European bank, Bloomberg News reported. A 5.2 percent decline in operating expense in the first quarter helped the bank increase net income to 1.11 billion euros ($1.3 billion) from 907 million euros a year earlier. That beat the 796 million-euro profit expected by the average of 8 analysts surveyed by Bloomberg.

Italian assets are being hit by a brisk sell-off, with the growing prospect of a second general election within months leaving Milan stocks looking distinctly out of fashion with investors and the country’s bond yields rising, the Financial Times reported. Italy’s main stocks benchmark, the FTSE Mib, is down 2.2 per cent, a significantly sharper fall than the 0.2 per cent slip on the Europe-wide Stoxx 600. Financial stocks are taking the biggest toll on the Milan index. UniCredit is down by more than 3 per cent, with Intesa Sanpaolo weaker by almost 2 per cent.

The sale of Italy's struggling carrier Alitalia has been further delayed because of continued political uncertainty following March's inconclusive elections, the industry minister said on Thursday. The out-going centre-left government had hoped to complete a sale by the end of this month, but Carlo Calenda told reporters Rome now expected to finish the process by the end of October, the International New York Times reported on a Reuters story. The government also put back the deadline for repayment of a 900-million-euro (784 million pounds) bridge loan to Dec. 15.

Italian banking stocks rallied and bonds rose on Tuesday after the country's biggest lender, Intesa Sanpaolo, agreed a bad loan sale at favourable conditions, which investors say could help other lenders achieve better terms and boost lending, the International New York Times reported on a Reuters story. Italian banks still hold some 285 billion euros ($353 billion) in troubled loans four years after a deep recession that had pushed that figure up to 360 billion euros, curbing lending to businesses and raising fears of a big bank failure.

Italy's Banca Monte dei Paschi di Siena (MPS) will meet investors in London on April 4, two sources close to the bank told Reuters, as the Tuscan lender seeks to soothe concerns over its turnaround progress, the International New York Times reported on a Reuters story. Monte dei Paschi is grappling with falling revenues and high bad loans that led to an 8.1 billion euro ($10 billion) bailout last year, with Rome injecting 3.9 billion euros into the country's fourth-largest bank and investors shouldering the rest.

Italy's budget deficit amounted to 2.3 percent of gross domestic product in 2017 and the public debt stood at 131.8 percent, national statistics bureau ISTAT reported on Wednesday, revising up its previous estimates. On March 1, ISTAT had reported a deficit-to-GDP ratio of 1.9 percent and a debt-GDP ratio of 131.5 percent, both down from the previous year when the deficit stood at 2.5 percent and the debt at 132.0 percent, the International New York Times reported on a Reuters story.

The top executives of bailed-out Italian bank Monte dei Paschi di Siena told investors in London on Wednesday the bank is making progress with its turnaround plan, two fund managers who attended the meetings said, the International New York Times reported on a Reuters story. CEO Marco Morelli and CFO Andrea Rovellini said in one-to-one investor meetings they were confident about hitting targets agreed with EU authorities to clear the rescue, one fund manager said.

Italian government debt has the potential to be most affected among eurozone countries by the uncertainty over replacing Euribor, Europe’s main interbank lending rate that has been tarnished by rigging scandals, the Financial Times reported. Almost €150bn of floating rate Italian debt is tied to the benchmark, according to new research by the Association for Financial Markets in Europe. About €15bn of Irish debt is linked to Euribor while some €7.2bn of Portuguese bonds are.