Italian banks shares have suffered as a result of the demise of Prime Minister Mario Draghi’s administration.
Banks are also susceptible to a worsening of the economic outlook because they are subject to higher Italian debt yields owing to their substantial holdings of national bonds as well as via their cost of funding.
Italy’s capacity to fulfil the obligations to which post-pandemic European Union subsidies are connected may be threatened by the change of administration and Meloni’s demands that the country’s national recovery plan be reviewed.
SANANO, INTESA (ISP.MI)
The CEO of Italy’s main bank, Carlo Messina, has frequently urged Rome to use its substantial personal capital and state assets to maintain its debt and achieve “financial independence.” Italy’s leading bank is the second largest holder of Italian debt behind the European Central Bank.
After pulling out of the proposed takeover of Monte dei Paschi di Siena (BMPS.MI), straining relations with the government of then-Prime Minister Draghi, CEO Andrea Orcel may be given a fresh start by a new administration.
THE MONTE DEI PASCHI (BMPS.MI)
The state-owned bank’s most recent cash call, which comes at a challenging time for the markets in October, will be set against the backdrop of the new government’s formation.
The previous administration successfully delayed Rome’s 64% ownership of the bank until the end of 2021, therefore the new administration will likewise have to re-privatize the bank.
To assist finance programmes to protect businesses and households from rising energy bills, Italy has approved steps to tax energy companies.
The proposal of a cap on energy prices across all of Europe, made by the present administration but still lacking widespread acceptance in Europe, is supported by the platform of the rightist coalition.
Additionally, the right wants to discuss with Brussels adjustments to Italy’s recovery plan that would raise spending to address the energy issue and restart nuclear energy development.
ENI, ENEI.MI, and ENEL (ENI.MI)
Taking complete ownership of national energy companies Eni & Enel, as the French administration has attempted with EDF (EDF.PA), was ruled out by Meloni, who reaffirmed that the government must protect locally important assets and prevent foreign takeovers.
The CEOs of Enel & Eni will have their contracts up for renewal next year, and the incoming administration will determine whether to do so.
To bolster efforts to identify alternate gas suppliers, the state-controlled gas utility company purchased a hovering LNG regasification terminal (FSRU) in June.
By the end of October, Snam hopes to begin work to moor the dock at Piombino, Tuscany. To enhance LNG imports, it plans to connect it to the utility grid by next spring.
The infrastructure, which is already encountering opposition from local officials, might be slowed down or advanced by the next administration.
Meloni has frequently expressed his fervent support for the Western alliance towards Ukraine and made commitments to increase defence spending.
CEO Alessandro Profumo stated on July 28 that its state-owned defence company was seeking to achieve a deal for the purchase of its naval torpedo arm Wass and its OTO Melara cannon manufacturer unit, but that any potential arrangement would need to be finalised by a new administration in Rome.
Next year, Profumo’s mandate will be up for renewal, much like that of the CEOs of Eni & Enel.
TIM (Telecom Italy) (TLIT.MI)
To combine the landline grids of state-owned competitor Open Fiber and TIM to form a unified broadband network in Italy, Brothers of Italy has advocated for the renationalization of the telecoms business.
That is in opposition to TIM CEO Pietro Labriola’s plan to concentrate on services by selling TIM’s networks to state lender CDP.
Brothers of Italy applauded CDP’s choice to hold off on submitting its non-binding offer for TIM’s network until after the election.