The Haizum Italian Insider Report is a monthly news service that monitors the most relevant issues in Italy. This document focuses on political, Economic, and Strategic matters, considering 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.
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The recent months in Italy have witnessed significant developments across various sectors, underscoring the nation’s evolving role in both domestic governance and international affairs. In the realm of institutions and judiciary, the Meloni Administration’s strategic appointments to the European Court of Justice and Chief Justice Cassano‘s comprehensive review of the Italian justice system highlight critical assessments and advancements in legal frameworks, influencing both domestic and international dynamics.
Turning to defense, anticipation surrounds the forthcoming NATO leadership succession, alongside Italy’s Senate-led military export reforms, indicating a commitment to modernization and alignment with global security paradigms. Moreover, collaborations between COVI and ASI emphasize Italy’s proactive stance in enhancing its strategic capabilities, particularly in multidomain space operations.
Diplomatically, Italy’s engagements with Turkey and Kazakhstan underscore efforts to deepen economic ties and leverage shared interests for mutual benefit. Prime Minister Meloni’s visit to Turkey and agreements forged with President Tokayev signify a renewed focus on economic collaboration, reflecting Italy’s evolving role on the global stage.
Economically, Italy faces divergent trends with recovery in the services sector contrasted by setbacks in manufacturing, compounded by disruptions in trade routes across the Red Sea. However, Italy’s bid to host the European Anti-Money Laundering Authority signals a commitment to combating financial crimes, aligning with broader European financial governance objectives.
In terms of national security, significant reforms are underway, particularly in regulatory frameworks such as the Golden Power legislation, exemplified by conditional approvals of deals like the TIM-KKR transaction, reflecting Italy’s proactive stance in safeguarding critical assets.
Amidst these developments, Italy’s strategic companies navigate complex landscapes, as seen in Enel‘s expansion efforts and recalibration in Argentina, Intesa Sanpaolo‘s leadership transitions, Leonardo‘s international collaborations, and ongoing negotiations surrounding TIM’s submarine cable unit Sparkle.
The Meloni Government has chosen two jurists to replace Lucia Serena Rossi and Giovanni Pitruzzella at the European Court of Justice. The selected candidates are Massimo Condinanzi and Oreste Pollicino.
Condinanzi, a specialist in European law and a professor at the University of Milan, also serves as the coordinator of the mission structure on EU infringements at Palazzo Chigi. He works closely with Minister for EU Affairs Raffaele Fitto, who is responsible for the designation.
Oreste Pollicino, a professor at Bocconi University and originally from Messina, has been designated as the Advocate General, the role previously held by Pitruzzella. Pollicino is also renowned for his expertise in digital law and privacy.
Lucia Serena Rossi, a professor of EU Law at the University of Bologna, was appointed by the Gentiloni Government in 2017 as a judge at the highest level of EU justice. Her term has expired. Pitruzzella, on the other hand, had to leave his position at the ECJ because the President appointed him as a judge of the Constitutional Court.
Margherita Cassano is the Chief Justice of the Italian Supreme Court, also known as the Cassazione. She recently provided an overview of the state of the Italian justice system during the inauguration ceremony of the 2024 Judicial Year, attended by President Sergio Mattarella.
In her address, Cassano outlined the developments of the past 12 months, focusing on reforms and their implementation across various judicial districts. Notable points from her presentation include:
Civil Sector: A decrease of 8.2% in pending cases in the Tribunals and 9.8% in the Courts of Appeal. The average duration of proceedings reduced by 6.6% in the first instance and 7% on appeal. The disposition time also decreased by 6.4% in Tribunals and Courts of Appeal, partly facilitated by mediation.
Criminal Sector: A reduction of 13% in pending cases in Tribunals and 6.5% in Courts of Appeal. The number of finalized proceedings increased by 8.3% at the first instance and 10.6% on appeal. The disposition time decreased to 310 days in Tribunals and 689 days in Courts of Appeal.
Despite these improvements, Cassano highlighted three critical issues:
Femicides: Despite an overall decrease in homicides, there were 120 cases of women being victims out of a total of 330 homicides. This indicates a persistent concern despite some reduction from previous years.
Overcrowding in Prisons: The prison system continues to face overcrowding issues, with 62,707 detainees (including 2,541 women) compared to the available capacity of 51,179 places.
Work-related Deaths: There were 968 reported cases of work-related deaths in the first eleven months of 2023, a slight decrease from the same period in 2022, but still a significant concern according to INAIL (Italian National Institute for Insurance against Accidents at Work.
As 2024 unfolds, not only Europe braces for pivotal elections and the selection of new leaders for the Council of Europe and the United States presidency, but also the NATO summit gears up for a change in leadership. Jens Stoltenberg, the former Norwegian prime minister who has helmed the military alliance for a decade, is set to step down. Despite initial nominations during the Vilnius NATO summit, member states are yet to reach a consensus. However, a decision is anticipated by next spring.
The ideal candidate profile necessitates a figure with robust international relations and an unwavering pro-NATO stance, typically drawn from significant political backgrounds. Currently, the frontrunner is the outgoing Dutch Prime Minister, Mark Rutte, with backing from the Royal United Services Institute, renowned for its defense and security expertise.
Reflecting on past transitions, when Stoltenberg assumed office in 2014, Italy presented strong contenders in Franco Frattini and Enrico Letta. However, Frattini faced opposition from Barack Obama due to perceived proximity to Silvio Berlusconi. Matteo Renzi, then Italian Prime Minister, withdrew Letta‘s candidacy in favor of Stoltenberg.
In the current landscape, potential successors include prominent figures like Mario Draghi, Enrico Letta, Paolo Gentiloni, Giampiero Massolo, Elisabetta Belloni, each carrying varying degrees of favorability within Italy’s political spheres.
The Senate Foreign Affairs and Defense Committee has greenlit the Government’s bill for discussion in the Chamber, which aims to amend the law governing defense import-export, known as Law 185. The primary reform entails the reintroduction of the Interministerial Committee for the Exchange of Defense Materials (CISD) within the Prime Minister’s Office, a body previously abolished in 1993. This committee will oversee the general guidelines for implementing Law 185 and overall defense exchange policies. Comprising ministers from Foreign Affairs, Interior, Defense, Economy, Enterprises, and Made in Italy, the CISD will be chaired directly by the Prime Minister, with the Undersecretary to the Presidency of the Council serving as secretary. This measure has been repeatedly advocated by the defense sector. The goal is to transfer the accountability, currently borne by a single figure—specifically the director of Ministry of Foreign Affairs’ UAMA (Office for Armament Material Procurement)—to a shared political responsibility. With this decision, the executive aims to streamline UAMA’s role to issuing necessary documentation and overseeing the administrative implementation of measures outlined by the law.
Italian Prime Minister Giorgia Meloni‘s inaugural visit to Turkey, where she met with President Recep Tayyip Erdogan, marks a significant milestone in bilateral relations, emphasizing the burgeoning economic ties between the two nations. The visit comes on the heels of numerous engagements in multilateral forums and serves as an opportunity to assess the current state of affairs. Notably, bilateral trade has surpassed 25 bln euros, with both Governments aiming to escalate it to at least 30 bln by 2030.
Italy now stands as Turkey’s fifth-largest global trading partner, second within the Eurozone (following Germany), and foremost in the Mediterranean region. The trade balance leans in favor of Turkey, with Ankara reporting a positive balance of $1.4 bln in the January-July 2023 period, while Italian exports dipped by 3.2% annually, juxtaposed with a 9.1% surge in Turkish imports. Meloni’s visit aims to establish a Joint Economic-Commercial Commission (Jetco) and host a business forum, signifying Italy’s intent to bolster cooperation with Turkey, particularly regarding irregular immigration containment and Libya.
Noteworthy projects include Italy’s involvement in Turkey’s ambitious Transportation and Logistics Master Plan, featuring investments exceeding $200 bln by 2053. Italy’s presence in Turkey extends beyond industry titans like Eni, Saipem, Ansaldo Energia, Generali, and Ferrero, encompassing over 1,500 Italian companies. Projects such as the construction of a steel plant near Izmir by engineering firm Danieli and Leonardo’s bid to supply Eurofighter jets to the Turkish military underscore the depth of bilateral economic engagement.
The visit of Kazakh President Kassym-Jomart Tokayev to Italy has culminated in the signing of a joint declaration and the sealing of seven intergovernmental agreements alongside sixteen commercial memorandum of understandings. Before attending the investment roundtable at the Italian Ministry of Foreign Affairs, Tokayev held meetings with Italian President Sergio Mattarella and Prime Minister Giorgia Meloni. Italy stands as a crucial trading partner for Kazakhstan, ranking as its top export destination and the third-largest overall trading partner after Russia and China. Italian investments in Kazakhstan amounted to 671 mln euros in 2019, primarily driven by the oil and gas sector.
Italian companies active in Kazakhstan include Ferrero, Iveco, Eni, Saipem, Maire Tecnimont, Valvitalia, Tenaris, and Medexport Italia. Several documents, including memorandums of understanding and commercial agreements, were signed during the investment roundtable. Before Tokayev’s visit, Bloomberg reported that major oil companies, including Eni, Shell, ExxonMobil, and TotalEnergies, were nearing an agreement with Kazakh authorities regarding the Kashagan oil field. The agreement aims to avoid a $5 bln fine and includes provisions for the companies to invest $110 mln over two years in social development projects in Kazakhstan.
As 2024 begins, Italy faces new tensions and risks following a positive end to 2023, particularly in the services sector. Despite low inflation and expected declining interest rates, credit remains expensive. Investments show less negative trends, but consumer spending remains uncertain, although employment rates are on the rise. While service industries are rebounding, the manufacturing sector experiences a sharp decline, with uncertain prospects for Italian exports.
Italy has incurred significant economic losses due to disruptions in trade routes across the Red Sea, with damages estimated at 8.8 bln euros between November 2023 and January 2024. These disruptions are expected to impact consumer prices, potentially reigniting inflationary pressures. The significant economic repercussions highlight the vulnerability of global trade routes and their direct consequences on Italy’s economy.
The Italian Government is gearing up to invest 27 mln euros to secure the headquarters of the European Anti-Money Laundering Authority (AMLA) in Rome. On February 22, Brussels will decide which candidate among the nine competing cities, including Vienna, Vilnius, Frankfurt, and others, will host the AMLA. The authority will oversee compliance with European anti-money laundering regulations. Rome, vying for the AMLA after a setback with Expo2030, proposes to house it in the EUR district, specifically in the iconic twin towers of the former Ministry of Finance. The decision will be made through a vote by the European Parliament and member states.
Confindustria, Italy’s leading industrial association, is in the midst of selecting its new leadership following Carlo Bonomi‘s tenure. The race for the presidency is heating up, with Mariella Enoc, Andrea Moltrasio, and Ilaria Vescovi emerging as the top contenders, alongside Luciano Vescovi as a reserve option. The selection process involves a commission tasked with evaluating candidates and consulting the association’s base. Aspiring candidates must secure at least 20 signatures and undergo scrutiny from the commission. Meanwhile, the appointed “sages” will assess whether they meet the prerequisites for the Confindustria presidency. Emanuele Orsini, CEO of Sistem Costruzioni and Bonomi’s deputy, appears to be leading the race, reportedly securing over 40 endorsements.
Italy is setting ambitious goals to position itself as a European energy hub, particularly emphasizing the role of hydrogen in the energy transition. The Government’s objective, outlined in the National Recovery and Resilience Plan, allocates 3.5 bln euros to the energy sector. This commitment is further underscored by accelerated efforts initiated through Government decrees to define incentives for hydrogen production. Minister of Energy Gilberto Pichetto Fratin highlights the significant opportunity for Italy in the hydrogen sector, emphasizing the importance of reducing greenhouse gas emissions. The Government aims to achieve a contingent production target of 250,000 tonnes per year of renewable hydrogen and 50,000 tonnes of biohydrogen by 2027.
To support this initiative, the Government plans to provide financial incentives to bridge the cost gap between hydrogen production and conventional fuels, with a maximum value ranging between 3 and 5 euros per kilogram. Additionally, a technical committee has been established to develop guidelines based on the evolving regulatory framework in Brussels concerning hydrogen sector governance and infrastructure planning. Meanwhile, Snam unveils a new investment plan until 2027, totaling nearly 12 bln euros, focusing on transitioning towards cleaner energy sources and enhancing infrastructure for transport, storage, liquefied natural gas (LNG), biogas, and hydrogen.
Italy’s Ministry of Environment is spearheading comprehensive reforms, including a complete overhaul of the Environmental Code and regulatory simplification efforts, aligning with the country’s commitments under the National Recovery and Resilience Plan (and its presidency of the G7. The deadline for the Commission tasked with revising the Environmental Code has been extended to September 30th, with further deadlines for legislative enactments pushed to June 30th, 2025. The revision aims to update the Unified Environmental Text (TUA), enacted almost two decades ago, to reflect contemporary legal and environmental frameworks, including recent constitutional amendments emphasizing environmental protection and sustainability.
The year 2024 holds promise for reforming Italy’s Golden Power legislation, with indications pointing towards a potential overhaul. Recent data reveals a slight decrease in notifications sent to Palazzo Chigi, reflecting a broader regulatory landscape and tighter regulations. Calls for harmonization of norms have intensified, particularly with the impending implementation of European directives, as urged by the Senate. The directives include Nis 2, focusing on data security obligations for companies, and Cer, addressing the resilience of critical entities, both slated for implementation by October.
According to the Golden Power Observatory, founded by Michele Carpagnano, partner at Dentons, there were approximately 570 notifications sent to Palazzo Chigi in 2023 for operations falling within the Golden Power scope. Since its inception in 2014, Golden Power notifications have surged from a mere 8 to over 570 in 2023, reflecting its growing significance in safeguarding strategic sectors.
Ahead of market opening, TIM communicated a note confirming the green light from the Council of Ministers for the operation of transferring the network to the American fund KKR, with the Treasury alongside. The conditional approval “represents a further fundamental step in the operation” involving NetCo (the company holding essentially all of TIM’s fixed network infrastructure), “to protect national interests and guarantee state control over the strategic assets” explains a note from Palazzo Chigi. “The Council of Ministers’ resolution includes the commitments that the parties have undertaken, starting from the creation of the security organization, the appointment of the Italian citizen manager, the exclusive competence over all matters affecting strategic assets.
This month marks a crucial period for Sparkle, a global operator and one of the world leaders in submarine cables. As Equita highlights, efforts are being made to bridge the valuation gap with TIM’s expectations, indicated at 200 mln euros (in November, the offer envisaged a value of Sparkle of 600 mln euros +150 mln euros of earn-out).
The Italian Government is working on a privatization plan worth approximately 20 bln euros, as highlighted by an interview with the Minister of Economy Giancarlo Giorgetti. “The sale of shares on the market pursues various objectives – as stated on the Ministry of Economy and Finance website – in particular: reducing public debt, increasing the efficiency, effectiveness, and economic management of the organizations involved.”
Minister Giorgetti clarified, “It is more accurate to speak of rationalization of the participation assets; therefore, the public decides to increase its stake in some entities and sell other shares to make everything more efficient, rational, and up-to-date.” The first state-owned companies to hit the market will be listed entities like Poste Italiane, whose stock currently trades at around 10 euros. Similarly, the Government aims to privatize a stake between 10% and 20% of Poste Italiane to raise up to 2.5 bln euros. The same applies to Eni (trading at 15 euros), with rumors suggesting a plan to sell a 4% stake.
The Ministry of Economy and Finance oversees numerous participations, divided into listed companies, companies with listed financial instruments, and unlisted companies. A Government that has made protecting national interests a cornerstone of its electoral campaign cannot approach the issue of participations superficially. Also on the privatization radar is Rai Way, a subsidiary of Rai. Rai Way manages transmission towers, 65% of which are owned by the Rai Group after partial privatization during the Renzi Government. The Meloni Government aims to privatize 15% of Rai Way, which would generate 200 mln for the state.
Companies such as Enel are unlikely to be put up for sale because the state’s stake has already dropped to 23.5%. Companies like Enav, Leonardo, Snam, and Terna, operating in critical sectors or managing strategic infrastructure, are also unlikely to be privatized. A contentious issue concerns Ferrovie dello Stato. The Government is considering bringing in private investors to the parent company FS. However, a valuation of the network, the group’s main asset, is necessary first, combining its value with that of the state roads after the incorporation of Anas.
The Italian Government pledges a 90 mln euro investment from the National Recovery and Resilience Plan to bolster Enel’s solar panel factory, 3Sun, in Catania. This infusion aims to expand the facility’s capacity to 3 gigawatts by year-end, creating approximately 700 direct and a thousand indirect job opportunities. Positioned as Europe’s largest solar production hub, Catania’s site aims to rival Asian counterparts, leveraging technological superiority. Apart from governmental aid, Enel secured 560 mln in financing from the European Investment Bank and a consortium of Italian banks led by UniCredit. Additional support is expected from the EU’s Innovation Fund, bolstering clean technology initiatives for ecological transition.
Contrastingly, Enel reassesses its stance in Argentina amidst promises of deregulation by President Javier Milei. Initially poised for an exit by 2023-2025, Enel is considering recalibrating its strategy to capitalize on anticipated business-friendly reforms. Enel may retain its electricity distribution arm, Edesur, following Milei’s pledges to liberalize the energy market. This potential shift contrasts recent divestments, including thermal power plants, as part of a 21 bln euros global asset disposal plan, which included exiting Peru and potentially Argentina. Enel’s reconsideration follows discussions between CEO Flavio Cattaneo and President Milei, reflecting optimism over Milei’s economic approach. Milei’s liberal stance, garners praise not only from Cattaneo but also from Paolo Rocca, CEO of Techint, reflecting industry sentiment towards prospective policy shifts.
Francesco Profumo’s departure from the presidency of Compagnia di San Paolo in Turin, slightly ahead of schedule, confirms earlier speculations and sets the stage for his ascent to the top of Intesa Sanpaolo. The Turin-based foundation, holding 6.5% of the bank, traditionally nominates its president, currently held by academic Gian Maria Gros-Pietro.
Italian aerospace and defense company, Leonardo, has announced the signing of a Memorandum of Understanding (MoU) with Saudi Arabia to collaborate in the aerospace and defense sectors. The MoU, signed with the Ministry of Investment of Saudi Arabia (MISA) and the General Authority for Military Industries (GAMI), aims to discuss, develop, and evaluate investment opportunities and collaboration in various areas, including space, maintenance, repair, and overhaul for aerostructures, localization for electronic warfare systems, radar, and helicopter assembly. The agreement also focuses on specific areas within the combat aviation and multi-domain integration sectors, where Leonardo is advancing next-generation technologies. These areas may include remotely piloted systems, integrated sensors, digital technologies, industrialization processes, and human capital development.
Stefano Pontecorvo, President of Leonardo, emphasized that the signing represents an important opportunity to strengthen defense cooperation and develop new technologies collaboratively. Lorenzo Mariani, Co-General Manager of Leonardo, expressed delight in announcing the MoU, highlighting its potential for assessing new collaboration opportunities across various sectors.
Telecom Italia has received an offer from the Italian Government for its submarine cable unit, Sparkle, potentially marking an end to negotiations with private equity firm KKR, whose previous offer was deemed inadequate by the company’s board of directors. The new offer from the Government includes an option for TIM to retain a minority stake in Sparkle. TIM stated that the offer also allows for the negotiation of alternative options, potentially with adjustments to contractual conditions, if TIM chooses to maintain a minority shareholding for a certain period and supports the execution of the strategic plan.
KKR intends to notify the acquisition of TIM’s access network to the European antitrust authorities. The operation, which values TIM’s fixed network assets in a range of 19 to 22 bln euros, including debt and the realization of certain earnouts including the merger with Open Fiber’s network, was approved by TIM’s Board of Directors on November 5th and aims to finalize the transaction by summer.
The first shareholder Vivendi has opposed the operation, filing a lawsuit on December 15th. Vivendi considers the decision of TIM’s Board of Directors to approve the network sale without first going through a shareholders’ meeting as illegitimate. The operation has received the support of the Italian Government, which, through CDP, intends to acquire 20% of Netco, an asset considered strategically important, which will however be controlled by 65%-70% by the Americans of KKR and the Abu Dhabi Investment Authority.
Poste, through Poste Vita, is reportedly preparing to enter the TIM network game. According to rumors, the group has sent an expression of interest to F2i, to subscribe to a share of the fund destined to acquire about 10% of the new network company alongside the American fund.
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