SHARE
COPY LINK

POLITICS

Moody’s puts Italian banks and companies on ratings watch as political turmoil drags on

Moody's on Wednesday placed a dozen Italian banks and several major companies on negative ratings watch, as the country's political problems drag on.

Moody's puts Italian banks and companies on ratings watch as political turmoil drags on
The historical headquarters of Intesa Sanpaolo, one of the banks placed under surveillance. Photo: Marco Bertorello/AFP

The ratings agency said it was putting Intesa Sanpaolo, UniCredit and Mediobanca under surveillance after already placing Italy's Baa2 rating on review for a possible downgrade over the crisis.

Fuel giant Eni, postal service Poste Italiane, public TV network RAI and gas companies Snam and Itaglas were also put under negative watch.

The eurozone's third largest economy has been in political turmoil since a March 4th general election failed to throw up a clear winner.

A populist coalition of the Five Star Movement and the nationalist League looked possible, but President Sergio Mattarella rejected their pick for economy minister, the eurosceptic financier Paolo Savona.

Financial markets have been on a rollercoaster ride over the past few days, but Milan stocks closed up 2.09 percent on Wednesday, and the bond market strengthened slightly.

But investor doubts over Italy's financial stability remain, with the country struggling under a debt mountain of 2.3 trillion euros.

READ ALSO: 'Markets will teach Italy to vote for the right thing'

 

COST OF LIVING

Fuel tax cut and help with energy bills: Italy approves inflation aid package

Italy on Thursday night approved new measures worth around 17 billion euros ($17.4 billion) to help families and businesses manage the surging cost of fuel and essentials.

Fuel tax cut and help with energy bills: Italy approves inflation aid package

As expected, the final version of the ‘aiuti-bis‘ decree provides another extension to the existing 30-cents-per-litre cut to fuel duty, more help with energy bills, and a tax cut for workers earning under 35,000 euros a year.

The package also includes further funding for mental health treatment: there’s another 15 million euros for the recently-introduced ‘psychologist bonus’ on top of the 10 million previously allocated.

READ ALSO: What is Italy doing to cut the rising cost of living?

There are also measures to help agricultural firms deal with this year’s severe drought.

Italian Prime Minister Mario Draghi described the new package as an intervention “of incredible proportions”, which corresponds to “a little over 2 points of national GDP”.

However, he said, no changes were made to the national budget to pave the way for the new measures.

The measures will be funded with 14.3 billion euros in higher-than-expected tax revenues this year, and the deployment of funds that have not yet been spent, Economy and Finance Minister Daniele Franco said.

Italy has already budgeted some 35 billion euros since January to soften the impact of rising fuel costs.

The decree is one of the last major acts by outgoing Prime Minister Mario Draghi before an early general election next month.

Elections are set for September 25th but the former European Central Bank chief is staying on in a caretaker role until a new government is formed.

Draghi said the Italian economy was performing better than expected, citing the International Monetary Fund’s estimate of three percent for 2022.

“They say that in 2022, we will grow more than Germany, than France, than the average of the eurozone, more than the United States,” he told a press conference.

But he noted the many problems facing Italy, “from the high cost of living, to inflation, the rise in energy prices and other materials, to supply difficulties, widespread insecurity and, of course political insecurity”.

Inflation hit 8 percent in Italy in June – the most severe spike the country has experienced since 1976.

SHOW COMMENTS