Italy

Economic activity in Spain and Italy’s services sector has hit a six-month low according to a widely watched business survey, as consumer companies bear the brunt of lockdowns to battle the spread of coronavirus, the Financial Times reported. Italy’s IHS Markit purchasing managers’ index for services fell for the third consecutive month to 39.4 in November, while the Spanish index fell for the fourth consecutive month to 39.5. A reading below the 50 mark indicates that a majority of businesses reported a contraction in activity from the previous month.

Prezzo, the Italian restaurant group, is being sold to real estate company Cain International, the latest in a series of casual dining chains to change ownership as the pandemic piles more pressure on an industry struggling with high debt and too much competition, the Financial Times reported. Cain, a privately held, London-based group that has invested more than $5.9bn in real estate debt and equity since it was founded in 2014, will buy the company as a going concern, it said in a statement on Wednesday.

Italian former prime minister Silvio Berlusconi said on Tuesday his Forza Italia opposition party would not back a reform of the euro zone bailout fund, a move that puts the government in difficulty ahead of a crucial parliamentary vote, Reuters reported. Reform of the fund, known as the European Stability Mechanism (ESM), has lacerated the ruling majority. The 5-Star Movement - the biggest party in parliament - says it would increase the risk of a public debt restructuring.

France’s Credit Agricole offered to buy third-tier Italian lender Creval for 737 million euros ($875 million) on Monday, as a wave of consolidation sweeps Italy’s banking sector, Reuters reported. France’s No.2 bank had been considering expanding in Italy, its second biggest market, and both Creval and larger rival Banco BPM had been tipped as possible targets. Credit Agricole Italia will pay 10.5 euros per Creval share, a 21.4% premium on Friday’s closing price. Shares in Creval jumped 23.7% slightly surpassing the offer’s price. Credit Agricole closed up 3.9%. Banco BPM declined 3.7%.

Lockdowns in France and Italy are weighing down public mobility more than in other European countries, according to high- frequency data compiled by Reuters that suggest the two economies will take a correspondingly bigger hit, Reuters reported. Data ranging from use of Apple maps apps to Google’s user location history are proving vital tools for governments, central bankers and investors trying to gauge the economic impact of restrictions, weeks in advance of conventional indicators like consumer spending or industrial output.

Italy will use its forthcoming presidency of the Group of 20 major global economies to try to secure further debt relief for African states, a senior Italian diplomat said on Friday, Reuters reported. Italy takes over the annual rotating presidency of the G20 on Dec. 1 and will look to build on a deal struck by major international creditors in April that was aimed at relieving the world’s poorest nations of debt payments.

Italy plans to widen an existing guarantee scheme for bank loans in a move that will help the country’s lenders cope with any future defaults sparked by the pandemic, a draft of the 2021 budget showed, Reuters reported. Italian banks have raised alarm about the combined effect an obligation to write down problem loans in full over a set number of years could have when coupled with a stricter definition of default kicking in soon and the troubles virus-hit businesses will face once weaned off emergency support schemes.

Services companies in Italy and Spain suffered a fresh fall in activity last month as restrictions to contain the second wave of the coronavirus pandemic hit businesses, according to a widely watched business survey, the Financial Times reported. The IHS Markit flash services purchasing managers’ index dropped in both countries, with companies reporting sharp declines in demand and activity as a result of the pandemic, data released on Wednesday showed. The Spanish index was slightly better than most economists expected but still fell 1 point to a five-month low of 41.4 in October.

A sale of Banca Monte dei Paschi to UniCredit would be inappropriate after UniCredit announced it would appoint former Economy Minister Pier Carlo Padoan as chairman, lawmakers from Italy’s ruling 5-Star Movement said, Reuters reported. Padoan oversaw the bailout of Italy’s oldest bank, Monte dei Paschi, back in 2017, with Rome spending 5.4 billion euros ($6.31 billion) on a 68% stake. Under an agreement with European Union authorities, the stake must be sold by mid-2022. “It would be paradoxical if, after the public commitment that provided for a support of several billion euros ...

Illimity is evaluating potential bids on 2 billion euros ($2.4 billion) of impaired bank loans, a senior executive at the Italian bank said, as disposals resume after the hiatus caused by the coronavirus crisis, Reuters reported. Italy’s 340 billion euro market for problem loans is Europe’s biggest. After more than halving soured debts on their balance sheets in recent years to tackle the legacy of the previous slump, Italian banks are now bracing for an expected wave of defaults caused by COVID-19. Market activity froze at the height of the healthcare emergency.