The Haizum Italian Insider Report is a monthly news service that monitors the most relevant issues in Italy. This document focuses on political, Economical, and Strategic matters, taking into account the role of Italy within the European Union, the MENA region, and Transatlantic Relations. The report will deliver clever insights by leveraging Haizum’s deep connections in the national institutional ecosystem.
Reading Time: 20 Minutes
Giorgia Meloni, reviving relations with India, pledges Italy’s support for Narendra Modi to use his role as chairman of this year’s G20. Relations between Italy and India are elevated to a strategic partnership. There is also a defense cooperation agreement, which Modi emphasizes above all, explaining that it will lead to “joint military exercises and training.” From Fincantieri to Leonardo, new opportunities are opening for Italian companies in this and many other sectors.
Three years after the outbreak of the Covid pandemic that tore through the Bergamo area between February and April 2020, an investigation has been closed with 19 suspects including former Prime Minister Giuseppe Conte, former Health Minister Roberto Speranza, Lombardy Governor Attilio Fontana, and former Lombardy Health Councilor Giulio Gallera.
Elly Schlein is the new secretary of the PD. The Dem MEP wins against Stefano Bonaccini. The Third Pole hails Elly Schlein’s victory as the start of an interesting season for reformists.
ECB President Christine Lagarde is convinced that to combat inflation, interest rates are the most efficient tool, and there is every reason to believe that ECB will raise them another 50 basis points in March. Bank of Italy Governor Ignazio Visco stated that it will be essential to continue to balance the risk of a too-gradual recalibration, which could make inflation entrench itself in expectations and wage-setting processes. The Governor pointed out that the ECB has “made considerable errors over the past year in forecasting changes in consumer prices, far greater than those observed in the past.”
Economy Minister Giancarlo Giorgetti affirmed that the provision of a country-specific safeguard clause for asymmetric shocks is to be welcomed, but the criteria for triggering it should be better defined, ensuring that its application is not a strictly mechanical approach.
In 2022, Istat explains that the Italian economy grew strongly, but less than in 2021. In February, a rapid slowdown phase of inflation.
PARLIAMENT
The majority seeks a deal on bicameral presidencies
The parliamentary majority plan for the 18 bipartisan committee chairmanships is 7-4-4-2, and that hasn’t changed (excluding that of the Antimafia, already assigned to FdI even if Carolina Varchi‘s odds seem to be going down), with FdI taking the lion’s share, Lega and Forza Italia tied, two boxes to the centrists and a wild card for the opposition.
Giorgia Meloni, as leader of the center-right’s first party, should have 11 chairmanships: Cassa Depositi e Prestiti, Schengen, Childhood, Semplificazioni, Feminicide, Forteto, Insularity, as well as the leadership of the parliamentary delegations to the Council of Europe, INEC, the Mediterranean and NATO. The Lega would be given the presidency of Fiscal Federalism, Enti Gestori, the Waste Cycle, and the OECD. At the same time, Forza Italia would have the presidency of Banks, Regional Issues, and Tax Registry, plus a bicameral yet to be defined. Noi Moderati would get two chairmanships but there is no indication of which ones.
JUDICIARY
Judicial inquiry into Covid
Three years after the outbreak of the Covid pandemic that tore through the area of Bergamo between February and April 2020, an investigation has been closed with 19 suspects – these days recipients of notices of completion of the investigation – including former Prime Minister Giuseppe Conte, former Health Minister Roberto Speranza, Lombardy Governor Attilio Fontana, and former Lombardy Health Councillor Giulio Gallera. Bergamo prosecutors tried to shed light and identify responsibility for that tragedy.
NATIONAL SECURITY
Incentives reform essential for national cybersecurity
Cybersecurity is for Italy a great opportunity in light of the market’s strong growth rate (it is estimated that in the period 2021-2026, there will be investments in one trillion globally). This was stated by Alfredo Mantovano, Undersecretary of State to the Prime Minister’s Office and Delegated Authority for the Security of the Republic, in a message sent on the occasion of the event “The Cybersecurity Yard: technological development and national strategic autonomy” promoted by Luiss Guido Carli University and the National Cybersecurity Agency.
Adolfo Urso, minister of Enterprise and Made in Italy, announced the arrival in the Council of Ministers of “the enabling bill for the reform of incentives“. The goal of the Incentives Code will be to end the “jungle” of incentives. Urso added that cybersecurity is the key to redesigning Italy’s strategic assets.
Cybersecurity, new public 255 million E uros contract
The initiative – divided into three lots dedicated respectively to central Public Administrations (PAs), local PAs in northern Italy, and those in central and southern Italy – provides products and related services for public administration IT security. Consip has activated the new contract “Security on premises: perimeter security, endpoint protection, and anti-apt” – worth €255 million.
The contractual tool available to PAs is a Multibrand Framework Agreement, in which for each type there are 2 to 4 products from different manufacturers that the administration can select when finalizing the purchase and provides for the awarding of supplies and services by direct order.
Golden power exercised to protect Inwit
The transaction is the one between Oak BidCo and Vodafone for control of Vantage Tower, a wireless telecommunications company based in Germany. The latter also owns a 33% equity stake in Italy’s Inwit Spa, which is involved in telecommunications facilities. Provisions have been made to protect the listed company, which is also Italy’s leading telecommunications tower operator and plays a central role in the deployment of 5G networks.
DIPLOMACY
Giorgia Meloni strategic visit to India
Prime Ministers Meloni and Modi have strengthened diplomatic and economic relations between Italy and India, starting with the announcement of a new defense understanding. This year India and Italy are celebrating the 75th anniversary of their bilateral relations. The decade of cold relations after the Marò case and the AgustaWestland scandal, which had resulted in the suspension of Leonardo’s contracts, seems officially archived. There are 600 Italian companies present in India, and their number and turnover can expand substantially.
In addition to the meeting in New Delhi between Giorgia Meloni and Narendra Modi, Antonio Tajani, vice-president of the Council of Ministers and minister of Foreign Affairs, chaired the Business Forum of leading Italian companies in India. In addition to the CEO of Leonardo International, Pasquale Di Bartolomeo, and the CEO of Fincantieri China Fabrizio Ferri, speakers included the president of Tecnimont India, Gianni Bardazzi, the director of Enel Grids, Antonio Cammisecra, the brothers Matteo and Michele Colaninno of the Piaggio Group, the CEO of Italferr Andrea Nardinocchi, Stellantis’ India, Asia and Pacific operations director Carl Smiley, and Simest president Pasquale Salzano. Also worth highlighting is the presence of Sparkle‘s CEO, Enrico Maria Bagnasco, since the Tim Group subsidiary. Enel, through its subsidiary Gridspertise, has signed two memorandums of understanding with Tata Power Delhi Distribution Limited.
AEROSPACE & DEFENSE
Defense, Italy aims for the Indian market
The center-right Government prefers to focus, in the eastern quadrant, on India: the world’s fifth economic power (soon to become the third) and now on the verge of overtaking China as the world’s most populous nation (one and a half billion inhabitants). The first concrete signs of this choice, come from the Defense sector, where Minister Guido Crosetto delegated the approach to New Delhi Undersecretary Matteo Perego of Cremnago.
The occasion was the Speed Defence Minister’s Conclave in Bangalore to coincide with the Aero India 2023 Exhibition (800 companies present). Here a meeting took place between Government defense representatives from halfway around the world, then continued with bilaterals between Perego, the Indian Chief of Staff, General Anil Cluhan, and the Defense Minister himself, Rajnath Singh, agreeing on the need to renew the cooperation plan.
Crosetto meets with Milley, US Chairman of the Joint Chiefs of Staff
For the first time in eight years a US Joint Chiefs of Staff is traveling to Europe and Africa simultaneously, and General Milley‘s visit began in Rome. In the Italian capital, the Defense hosted the African Chiefs of Defense Conference 2023, an international meeting where the Pentagon and Palazzo Baracchini served as speakers to African partners sharing challenges and opportunities on the continent.
ECONOMY & FINANCE
Italian stocks have a solid foundation
The Financial Times focuses on Italian Government bonds and comes on the heels of positive reviews from the Economist, Times, Faz, and Le Figaro. It notes that Italy’s strength at the moment is its banks, which hold more than one-fifth of the index and have outperformed their European counterparts by nearly 20% points. The article cites UniCredit as leading the pack, pointing out that its share price has doubled, while BPER and Banca Popolare Milano are slower.
Post-pandemic Pnrr-related European funds, “of which Mario Draghi‘s Government obtained incredible 190 billion Euros (9% of GDP)”, are starting to flow through the economy. So it certifies that “Italian stocks at least have a solid base to build on”.
The Italian economy doing well
The Italian economy is on track to avoid recession again in the first quarter of 2023. In various analysts’ forecasts for 2023, the Italian GDP is doing better than expected. Energy prices have fallen down and metal prices are rising up, inflation is slower. Italy is proving very resilient, with industry and services segments improving, though not the construction one. Household consumption is holding up, investment is picking up, and there are more people employed but also more labor shortages.
The decline in energy prices since late 2022, which still remains well above the levels of two years ago, is helping to reduce inflation in Italy and Europe, and this suggests an end to rate hikes by 2023 (not before another couple of hikes). Gas prices remain relatively low in February (56 E uros/MWh on average), well below levels seen throughout 2022 (but were at 14 euros in 2019). Oil prices also seem to have stabilized ($83 per barrel), at just above pre-crisis levels ($64). Conversely, non-energy commodities (+3.4% since October), especially metals (+16.8%), are rising in early 2023, while food prices continue to fall (-1.2%).
Manufacturing rebounded in December (+1.6%), after three months of decline. SMEs have climbed back into the area of slight expansion (50.4 from 48.5), and business confidence has stopped falling and is hovering at modest levels. Alongside rising employment (+37 thousand in December), there is a labor shortage in Italy for a growing share of firms (7.3% from 1.8% at the end of 2019, in manufacturing), a sign of quantitative shortages and skills mismatches (but less than in the EU).
In 2022 Italian exports increased by 7.7% in volume, with the U.S. and France as the top markets; pharmaceutical and chemical-medical items led the way. This excellent dynamic incorporates, however, stagnation in the 4th quarter, which reduces the “drag” to 2023 (just +1.0%). In addition, signs of a slowdown in exports persisted in January.
ENERGY
Italy towards the RepowerEu energy plan
Italy is the main beneficiary of Next Generation Eu funds. Last August 13, the European Commission authorized the disbursement of a pre-financing of funds allocated to Italy, about 24.9 billion E uros, or 13 % of the resources allocated to Italy in total. The disbursement of subsequent funding will be conditional on the reforms set out in the National Recovery and Resilience Plan (NRPR).
723.8 billion Euros have been allocated under the Next generation Eu. Most states applied only for the portion of resources provided in the form of grants. In fact, only 7 countries also applied for loans. Among the member states that chose this option, Italy, with 122.6 billion E uros, is the country that applied for the largest share. Italy applied for the maximum share of grants. Without the loan request, therefore, it would not have been possible to finance all the measures contained in the NRRP, which would therefore have been more limited in scope. With this in mind, it should be remembered that the Draghi Government allocated additional resources with a special decree law.
Another interesting element to analyze concerns the share of investments in ecological transition and digitalization. In absolute values, Italy ranks first in the number of resources allocated to both sectors. In fact, Italy will invest 71.8 billion in green transition and 48.1 billion in digitalization.
Sprint on the Adriatic pipeline
Draw on NRRP funds, give a clean break to bureaucracy and authorizations, and appoint a commissioner. It passes by a three-move plan the squeeze that the Meloni Government is to impose to achieve in record time the strengthening of the Adriatic Line: remove the bottleneck that now limits the transport of gas from the south to the north of the country.
Without this work, already branded as strategic even by Europe, it is impossible to realize the European hub project of Prime Minister Giorgia Meloni: the rich additional dowry of Algerian gas, the doubling of gas arriving from Azerbaijan via TAP, and the new methane that can arrive from the new national production in Sicily and from regasifiers such as Gioia Tauro and Porto Empedocle, could not even reach Austria and Germany.
In short, those 170 kilometers of pipes that are supposed to connect Sulmona to Foligno are meant to take off the potential of the gas artery that from Massafra, near Taranto, is supposed to run up the Adriatic ridge for more than 690 kilometers crossing ten regions to Minerbio, near Bologna.
The Meloni Government will submit its final proposal in this regard to Europe by the end of March. It is a larger package of projects that must take into account the new scenarios opened up by the energy crisis and the additional RepowerEu funds. Of the 20 billion earmarked for all of Europe, Italy will get 2.5-3 billion, according to estimates. That comes to nearly 9 billion with the 5.5 billion that can be recovered from other instruments, such as the European Fund for Rural Development for the Common Agricultural Policy.
Paris calls, but Rome doesn’t answer on nuclear
Italy did not attend the meeting convened by France to form an alliance of pro-nuclear countries within the European Union. The meeting took place on the sidelines of the meeting in Stockholm among the twenty-seven energy ministers and was organized by Agnès Pannier-Runacher, the French Minister of Ecological Transition. A total of eleven countries participated: Bulgaria, Croatia, Finland, the Netherlands, Poland, the Czech Republic, Romania, Slovakia, Slovenia, Hungary, plus France.
France’s real goal was to send a strong signal in the various European talks on clean hydrogen.
KEY APPOINTMENTS
The countdown begins
The decisive month begins for the appointments of large state-owned companies listed on the stock exchange. The “seven sisters” Eni, Enel, Leonardo, Poste, Terna, Enav and Banca Mps. Almost all of the expiring top management will be replaced. The only one expected to be saved should be Claudio Descalzi, Eni’s C.E.O. since May 2014 (he was C.E.O., was promoted by Matteo Renzi, confirmed by Paolo Gentiloni three years later and by Giuseppe Conte in 2020). Descalzi emerged unscathed from a tricky maxi-corruption trial in Nigeria. Control lies with the Economy Ministry, which owns 4.34 % directly and an additional 25.76 % through Cassa Depositi e Prestiti. Eni’s shareholders’ meeting to approve the 2022 budget and appoint the new board that will lead the hydrocarbon group for the next three years is scheduled on the company’s calendar for May 10, in a single call.
On the same day, a meeting is scheduled for Enel, the power company controlled by the Economy Ministry with 23.5%. Virtually unanimous rumors give outgoing CEO Francesco Starace, who has been in the saddle like his peer Descalzi since 2014. Starace has changed Enel’s profile, invested in renewable energy, and achieved good industrial results. The group suffers from high debt, which with rising rates has greatly weakened its stock market listing. The Draghi Government did not like him, because of his handling of Enel’s interests in Russia (where his brother is the ambassador).
For the presidency of Enel, the Lega is pushing a big name, Paolo Scaroni, a manager who made a career in the public sector with the Berlusconi Governments, three years as CEO of Enel (2002-2005) and nine years at the head of Eni (2005-2014). Today Scaroni is the president of Milan. Three are in the running for the Enel CEO role. The frontrunner is Stefano Donnarumma. In May 2020 for Donnarumma there was a jump to the leadership of Terna. Donnarumma has one great merit for Prime Minister Giorgia Meloni: he jumped on the right-wing bandwagon long before the election victory.
Alternatively, another candidate at Enel could be the outsider Gianni Armani, since 2021 CEO of the Northwest municipalized company Iren, but previously a public executive first in the Terna group, then CEO of Anas from 2015 to 2018. Armani is the son of Pietro Armani, a boyar who served for 22 years on the board of Iri, from 1973 to 1995. In 1996, Prof. Armani was elected deputy with Alleanza Nazionale, the former Msi that is now FdI.
The third name circulating for Enel’s leadership is Flavio Cattaneo, executive vice president, and Italo partner. The manager landed in Rome in 2003, chosen by Silvio Berlusconi‘s Government as d.g. of Rai, a friend of Ignazio La Russa and Paolo Berlusconi. Cattaneo served for nine years as managing director of Terna (2005-2014). On March 31, 2016, he was appointed C.E.O. of Telecom Italia, from which he took leave on July 21, 2017, with a severance package of about 25 million Euros. As for Italo, there are rumors of a possible sale; there has been talking of interest from shipowner Gianluigi Aponte, who also proposed for Ita along with Lufthansa a year ago.
On the calendar for state spa nominations, the first meeting is that of Banca Mps, scheduled for April 20 in a single call. President Patrizia Grieco is on her way out, to be seen what the government’s CEO Luigi Lovaglio will decide.
The second assembly on the calendar is that of Enav, scheduled for April 28. The air traffic controller company is headed by a CEO wanted by the M5S, Paolo Simioni. The seat is considered available by the right-wing.
The other assemblies are scheduled for May 8 Poste Italiane, between May 8 and 15 Terna, for which the exact date will be set when the Government has decided whether to move Donnarumma to Enel. In that case, the meeting would be held immediately after that of the power company so as not to leave any holes, and finally Leonardo between May 2 and May 10.
For Poste, CEO Matteo Del Fante, first a rentier (in 2014 Matteo appointed him to Terna’s top job) and then in the good graces of the M5S, is expected to be replaced after two terms. He has already been appointed by the Draghi Government as chairman of the Jubilee 2025. Poste’s number one chair is aimed at co-director general Giuseppe Lasco, a former Guardia di Finanza noncommissioned officer.
For Terna there could also be Armani Jr. if he fails in his quest to scale Enel. But for Poste and Terna, a heavyweight outsider, a manager with a solid Cv who is an expert in networks, could also join the pack of candidates.
There is a change of leadership at Leonardo, a company that has not had a CEO from the aerospace and defense sector for nine years. Defense Minister Guido Crosetto has said, even publicly, that the right candidate to lead Leonardo’s relaunch is Lorenzo Mariani, formerly the group’s commercial director. Under Mariani, who is also the commercial director of the entire Mbda international group (Airbus and Bae Systems are also partners, Leonardo has 25%), Mbda has dramatically improved results.
There are also reports of moves by Gian Piero Cutillo, head of the helicopter division who is based in Lombardy, who may have the backing of the Lega and Economy Minister Giancarlo Giorgetti (his brother is a Leonardo helicopter executive). Perhaps the main uncertainty concerns the role Giorgia will want to assign to Roberto Cingolani, the physicist and former director of Genoa’s IIT whom Profumo hired as head of technology at Leonardo in 2019. Cingolani was minister of Ecological Transition under Draghi and has remained in the Government business as Meloni’s adviser on energy, although he has rejoined Leonardo, which pays his salary. For Cingolani there is also talk of a possible opportunity in the Japanese multinational Hitachi.
There are other expiring boards of directors, especially in the Mef‘s indirect investees. The complete list published on the Mef website includes more than 60 companies and at least 500 seats. In the Fs group, politics will have a voice in choosing the top management of the two most important operating companies, Rfi and Trenitalia, because the two boards of directors expire this spring. For Rfi, which leads the infrastructure hub and will manage a large part of the NRP funds that go to FS, there are already some internal candidates to take Vera Fiorani‘s place, a rare case of a woman CEO of a large company. One candidate is Umberto Lebruto, CEO of FS Sistemi Urbani. Lebruto, however, is among the defendants indicted in the trial for the Pioltello train accident on Jan. 25, 2018, which could hinder his appointment. Another suitor is Gianpiero Strisciuglio from Bari, appointed by Ferraris last May as CEO of Mercitalia Logistics, the freight hub.
At Trenitalia, CEO Luigi Corradi, who arrived in 2020 on the recommendation of the M5S by then undersecretary at Palazzo Chigi Riccardo Fraccaro, is considered to be on his way out. Attempting to recycle with the right-wing Sabrina De Filippis, head of regional transportation, who was already proposed by the M5S three years ago.
The nomination process starts with advisors: three firms selected
Via XX Settembre selected the headhunters who will support it in the choice of candidates for the renewal of the boards of directors of almost 70 subsidiaries. This year the choice would fall on three names, as reported by Radiocor: Spencer Stuart, Key2People, and Eric Salmon. In any case, it would not yet have been defined on which companies each consultant is to provide input.
In parallel, a purely political forum would be in the process of formation, which will deal with the issue of appointments, obviously under the direct supervision of Prime Minister Giorgia Meloni. The leaders of the three governing parties are known: Giovanbattista Fazzolari for Fratelli d’Italia, Alberto Bagnai for the Lega , and Licia Ronzulli for Forza Italia. Now, according to reconstructed reports, the idea would be to widen the table by adding two more components for each party: among the main names circulating are those of Gianni Letta, Antonio Tajani, and Guido Crosetto, but others could certainly be added to these; Lega’s Edoardo Rixi is also indicated as very active.
ENI
Memorandum of Understanding with ADNOC
Eni’s CEO Claudio Descalzi and Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technologies of the United Arab Emirates and Director General of Adnoc, signed a MoU outlining a framework of cooperation for future joint projects in the areas of energy transition, sustainability and decarbonization.
FINCANTIERI
Fincantieri in the United Arab Emirates
The Trieste-based shipbuilding group signed a cooperation agreement with Abu Dhabi Ship Building (Adsb), a subsidiary of Edge Group, a leader in the design, construction, repair, maintenance, refitting, and conversion of military and commercial ships, at Idex 2023, the international conference and exhibition dedicated to defense and security systems in Abu Dhabi.
Fincantieri has been present in the local market since 2008 and delivered three ships built in the Group’s Italian shipyards in 2013. The agreement was signed by Khalid Al Breiki, President of Platforms & Systems of Edge and Vice Chairman of Adsb, and Pierroberto Folgiero, CEO of Fincantieri. Present were, among others, the undersecretaries of defense of UAE, Mattar Salem Ali Al Dhaheri, and of Italy Isabella Rauti.
Then in December 2021, Fincantieri signed a memorandum of understanding with the Emirati sovereign wealth fund Mubadala Investment Company aimed at initiating potential collaborations in the field of advanced technologies and services in the naval, maritime, and industrial sectors.
INTESA SANPAOLO
Tension between Intesa Sanpaolo and Abi
The shakeup caused by Intesa Sanpaolo, which has revoked its mandate for union representation to Associazione bancaria italiana (Abi), is being felt in credit institutions and trade unions. Intesa wants to independently manage its participation in union bargaining. However, membership in the association remains confirmed, the credit group was keen to emphasize.
Intesa Sanpaolo launched a series of initiatives for its employees, including the so-called “short week,” flexible working hours and smart working. Topics that have been addressed for several months at the union table, however without reaching a balance.
SACE
Sace move for commodities
Trafigura, a world leader in commodities trading, announced that it has reached a five-year $500 million loan agreement with Sumitomo Mitsui Banking Corporation (Smbc), a Japanese bank around which major industrial groups from Japan and beyond gravitate.
The agreement will be guaranteed by Sace, a financial and insurance group under the control of the Ministry of Economy and Finance as part of the “Push Strategy” announced to strengthen Italy’s most exposed industrial supply chains in the non-ferrous metals sector, related to transformation and at the same time to open up growth opportunities in the most driving sectors in the medium to long term.
Sace already has a portfolio of operations and investment guarantees totaling about 165 billion Euros. Together with its subsidiaries and affiliates, it offers services to more than 25,000 companies, especially small and medium-sized enterprises, mostly devoted to exports in 200 foreign markets.
STELLANTIS
Stellantis results, workers, and electric vehicles
The automotive giant ended 2022 with net income up 26 % to 16.8 billion E uros and net revenues up 18 % to 179.6 billion E uros. Against this backdrop, net synergies reached 7.1 billion E uros, 2 years ahead of the targets announced at the Fca-Psa merger to achieve synergies of 5 billion E uros by 2024. These results jar with what is happening these days in Italy: Corriere Torino writes that companies in the automotive giant’s supply chain are receiving emails from the group’s purchasing managers asking them to revise downward the value of orders.
At the same time, on the workers’ front, in Mirafiori Stellantis has just informed the metalworkers’ unions that in February Saturdays will be working to keep up with the production increase of the electric 500, which is traveling toward 100,000 units a year. A demand that jars with the favorable treatment given to French blue suits. There are not a few observers who, after the merger with PSA, consider Stellantis to be increasingly francocentric: the latest news for Italian workers and suppliers also fuels such doubts.
Currently, Stellantis’ stable of electric vehicles numbers 23 Bevs and is set to double to 47 models by the end of 2024. The ultimate goal is to offer more than 75 Bevs globally and record electric vehicle sales of 5 million by 2030. But to do this, the group is asking the state for money. “Without incentives, electric cars are still too expensive for the middle class,” said No. 1, Carlos Tavares. It is an issue that had led to friction with the Government: Minister Adolfo Urso spoke about all the public funds that have come to Stellantis with development contracts for more than 2.7 billion to which is added the 8.7 billion multi-year automotive contract until 2030.
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