Italian companies will share in a payout of €40bn after the Cabinet of prime minister Mario Monti’s caretaker government approved a bill to pay back debt owed to the private sector to spur recovery in Italy’s recession-hit economy.
The bill’s timetable is for €40bn in payments over one year instead of over two years, the period proposed previously. “The payment will happen within 12 months,” economic development minister Corrado Passera confirmed at a press conference. The Cabinet also approved measures to contain Italy’s deficit to 2.9% of gross domestic product (GDP) this year, according to an e-mailed statement.
Around 215,000 companies are affected and the average debt is €422,000. Some two-thirds of the debts are owed to medical companies supplying the public health sector and the payments also include infrastructure projects.
Finance minister Vittorio Grilli added at the press conference that €20bn will be paid this year but have only a modest effect on this year’s deficit, but the payments will gradually increase Italy’s debt by €40bn. Payment of debts taken over by banks from suppliers will be made through government bonds, the statement said. Passera estimated these debts at between €15bn and €20bn.
Italy, which has Europe’s second-biggest debt burden, has been in recession since H211 2011. The Treasury expects the eurozone’s third-largest economy to shrink 1.3% this year, but to edge back into growth by the same amount in 2014.
Fitch Ratings cut Italy’s credit rating last month by one notch to BBB+ as an
inconclusive election in February
produced political paralysis that threatens the country’s ability to deal with the recession. The credit ratings agency (CRA) also said it expects Italy’s GDP to decline 1.8% this year as public debt peaks at almost 130%, up from 127% in 2012.
The US money market fund reforms came into effect in 2016 and are already dramatically shaping US fund industry with investors flooding out of prime funds and into government securities. While the reforms are similar, they are not the same. GTNews interviews Yeng Bulter, global head of the cash business at State Street Global Advisors on the differences.
The top five sectors Asian fintech investors are interested in are data analytics, blockchain, lending, payments and regtech, according to Gary Hwa, EY regional managing partner.
On the third day of the Singapore Fintech Festival conference, there was a focus on specific applications of fintech innovation. One was trade finance, which is clearly is ripe for a revolution.
Kicking off day two of the Singapore Fintech Festival, Deloitte Chairman David Cruikshank said that fintech is significant for three reasons. First, customer expectations of services are higher than ever. Second, barriers to entry are lower than before. And finally, financial institutions (FIs) face a threat of what a competitor might do.