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‘Made in Italy’ gets €260m to go global

The government on Thursday approved a plan to invest €260 million to promote Italian goods and services worldwide in an attempt to boost exports and attract more investment in the country.

Published: 27 February 2015 17:04 CET

'Made in Italy' gets €260m to go global

Made in Italy photo: Shutterstock

Italy’s minister for economic development, Federica Guidi, on Thursday signed the implementation decree for the investment plan.

The principal aim of the decree is to increase Made in Italy exports by €50 billion over a period of three years, business daily Il Sole 24 Ore reported.

It aims to attract €20 billion in foreign investment as well as target the emerging markets’ middle class.

The government also hopes to increase the number of exporting companies in Italy by around 20,000. In recent years around 200,000 Italian firms operate abroad. The decree must now be reviewed by the Supreme Audit Court.

The news comes after a Milan consultancy firm found that several Italian luxury brands – including Tod’s leather goods, cashmere king Brunello Cucinelli and eyewear giant Luxottica – posted positive revenue growth, ranging from slight to substantial, from worldwide sales in the first nine months of 2014.

According to a forecast from the European Commission (EC) earlier this month, Italy's economy is set for a gradual recovery this year as exports grow and households have more money to spend due to lower energy bills.

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Ahmad AL-RUBAYE / AFP

Ahmad AL-RUBAYE / AFP

“Following our in-depth investigation, we reached the conclusion that two public loans worth EUR 900 million granted by Italy to Alitalia gave the company an unfair advantage over its competitors, in breach of EU State aid rules,” said EU competition chief Margrethe Vestager said in a statement.

“They must now be recovered by Italy from Alitalia to help restore a level playing field in the European aviation industry.”

But the authorities in Brussels simultaneously said new flag airline ITA – set to start flying next month – was not liable to reimburse the money and that 1.35 billion euros being injected into the firm by Rome did not breach state aid rules.

“Italy has demonstrated that there is a clear break between Alitalia and the new airline ITA, and that its investment in ITA is in line with terms that a private investor would have accepted,” Vestager said.

“Once ITA takes off, it is for Italy and ITA’s management to make use of this opportunity once and for all. And we will continue to do our part to ensure fair competition in the European aviation sector.”

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Loss-making Alitalia was placed under state administration in 2017 but Italy has struggled to find an investor to take it over. The situation was only exacerbated by the coronavirus pandemic that grounded airlines worldwide.

The Italian government gave the company two loans for the amount of EUR 600 million and EUR 300 million in 2017, as Alitalia scrambled for liquidity without access to the debt market.

Earlier this year Italy said it had reached an agreement with the European Union for a bailout that creates a new debt-free company to take over some of Alitalia’s assets – ITA.

The board of directors of ITA last month approved a binding offer for 52 of Alitalia’s aircraft, related airport slots and other assets.

The Italian government has created a 100-million-euro ($117-million) fund to reimburse Alitalia customers.

Italy provided state loans to Alitalia totalling 1.3 billion euros between 2017 and 2019.

In July, it approved another 700 million euros for ITA.

Further sums are expected in 2022 and 2023, bringing the total to 1.35 billion euros.

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