Italy

Banca Popolare di Bari SCpA, an ailing Italian lender, is in advanced negotiations with an international credit fund over insuring its loans against default, seeking an easier way to reduce risk on its balance sheet, Bloomberg News reported. The potential transaction, known as a synthetic securitization, involves buying insurance from Christofferson Robb & Co, thereby transferring the risk of the loans going sour to the fund in return for a fee, according to people familiar with the talks.

Five potential investors showed up for the rescue of Italian fashion house Roberto Cavalli, the company said on Friday without naming the suitors, Reuters reported. The Tuscan company received three binding offers for taking over the whole group, one binding proposal for just some assets, as well as a non-binding expression of interest. In the next few days the board will look at the bids along with company’s main shareholder Clessidra, with the aim of choosing the best offer to ensure the industrial continuity of the luxury group, a source close to the matter said.

Italy aims to convince the EU to delay until the autumn a decision on whether to open a disciplinary procedure over its finances, which is expected to look healthier after tax revenue data in July, four coalition sources said, The Irish Times reported. The European Commission, whose term ends on October 31st, will also look more like a lame duck after the summer and Rome will have more time to argue its case for a reform of EU fiscal rules, two of the sources said.

On Wednesday, Brussels issued a formal warning that sets Rome on the path towards its naughty corner for fiscal delinquents — the so-called excessive deficit procedure (EDP) — which, in extremis, could lead to fines or suspended transfers from the EU budget, the Financial Times reported in a commentary. This step is formally the same as the one Brussels took last autumn, that led to a compromise avoiding sanction. But there is much less chance of such an outcome now, economists say. Last time, Brussels objected to Rome’s declared budget plans, which were accordingly tweaked.

It would be either illegal or useless for Italy to issue bonds to pay its suppliers as such notes would break European currency rules or add to the country’s massive government debt, Italian finance minister Giovanni Tria said on Saturday, Reuters reported. Speaking on the sidelines of a G20 meeting in Japan, Tria sought to soothe fears about Italy’s public finances, which have unnerved investors and raised the threat of disciplinary action from the European Commission since an anti-austerity government took office a year ago.

Brussels and Rome have clashed over Italy’s economic policies, reigniting an argument over EU budget rules in a process that could lead to financial sanctions against Giuseppe Conte’s anti-establishment government, the Financial Times reported. The European Commission said on Wednesday that Italy had failed to meet agreed targets for reining in spending and cutting public debt, the second highest in the eurozone at 132 per cent of gross domestic product in 2018.

Business conditions in Italy’s manufacturing industry deteriorated in May for the eighth successive month, although the rate of decline slowed, according to a closely watched survey released on Monday, the Financial Times reported. The IHS Markit purchasing managers’ index for the manufacturing industry in Italy on Monday reported a rise in May to 49.7, which indicates the majority of manufacturers still reported a contraction in activity, from 49.1 a month earlier. The reading was stronger than the 48.6 consensus from Reuters poll of analysts.

The Italian government has told the European Commission that it plans to launch “a comprehensive plan of spending review and revenue enhancement” in a bid to avert a row over the country’s mounting debts, the Financial Times reported. Brussels wrote to Rome on Wednesday, expressing concern about its budget forecasts and warning the Italian government against its attempts to expand Italy’s budget.

Brussels has sent a letter warning Italy’s populist government over its rising debt levels, setting up a fresh clash between the EU and Rome less than week after European elections, the Financial Times reported. The European Commission on Wednesday wrote to Italy’s finance ministry asking for an explanation on the country’s deteriorating debt situation.

Matteo Salvini has called for a “fiscal shock” of tax cuts in Italy as he exerts his political influence after a resounding victory in the European elections, but Brussels is preparing to hit back over Rome’s budget plans, the Financial Times reported. Italy’s deputy prime minister and leader of the anti-immigration League party said that Italy “must lower taxes”. “We need a Trump cure, an Orban cure, a positive fiscal shock to restart the country,” Mr Salvini said in a radio interview on Tuesday.