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.
Reading Time: 15 Minutes
Italy has been at the forefront of several strategic developments, cementing its role as a key player on the global stage. Italian President Sergio Mattarella attended the Arraiolos meeting in Krakow, where discussions with EU heads of state emphasized the importance of collective defense and Italy’s dedication to supporting Ukraine in the face of growing global tensions. Similarly, Italy’s hosting of the G7 Defense meeting in Naples saw defense ministers from leading nations come together to discuss military readiness and NATO’s future, with Italy reaffirming its pivotal role within the alliance. Despite its robust defense strategy, the country faces ongoing debates regarding its defense budget and the sufficiency of its military spending.
Italy’s diplomatic engagements have been equally impactful, as Prime Minister Giorgia Meloni’s visit to Jordan highlighted the strengthening of ties in defense, humanitarian efforts, and security. The country also made significant strides in fostering cooperation with the Middle East, signing a strategic partnership agreement with Qatar and expanding its presence in Libya with multiple agreements covering sectors like health and energy. These engagements reflect Italy’s broader vision of becoming a central hub for diplomacy in the region.
On the economic front, Italy’s outlook for 2024 and 2025 is characterized by modest growth, driven primarily by the services sector. While industrial production and investment are in decline, employment is expected to rise, albeit with fewer hours worked. The Italian government is addressing various challenges, including rising tensions over defense spending and the management of strategic national assets. Italy’s commitment to sustainability is also evident in its plans to re-enter the nuclear sector, with the launch of a state-owned company for nuclear reactor development, signaling a shift toward long-term energy diversification.
Strategic business moves have also shaped Italy’s economic landscape. The confirmation of Open Fiber’s leadership by CDP highlights Italy’s focus on strengthening its telecommunications infrastructure, while Enel’s impressive profit growth, bolstered by renewable energy, signals a shift toward greener economic practices. Meanwhile, Eni’s divestment of its Alaskan assets for $1 billion underscores its strategy of redirecting funds to energy transition projects. Additionally, Fincantieri’s collaboration with the UAE’s Edge in developing advanced underwater and unmanned technologies marks Italy’s continuing role at the cutting edge of defense and technological innovation.
On October 10, 2024, the annual Arraiolos meeting, a forum for EU heads of state, was held at Wawel Castle in Krakow, Poland, focusing on key defense issues amid growing global tensions. Italian President Sergio Mattarella joined other leaders to discuss the ongoing conflicts in Ukraine and Gaza, alongside broader EU challenges such as energy security and relations with major global powers. With Poland as host, its strategic position near Ukraine made it a pivotal player in discussions, particularly on continued EU support for Kyiv and Ukraine’s potential NATO membership.
Concurrently, Ukrainian President Volodymyr Zelensky is scheduled to meet Italian Prime Minister Giorgia Meloni and Pope Francis in Rome, underlining the international community’s support for Ukraine. Also on the agenda, NATO’s nuclear exercise “Steadfast Noon” will take place soon in Belgium and the Netherlands, involving 60 aircraft from 13 countries to demonstrate preparedness and deterrence capabilities.
On October 31, 2024, Minister of Culture Alessandro Giuli announced the appointment of Valentina Gemignani as his new Chief of Staff, following the resignation of Francesco Spano amid controversies. Gemignani, a seasoned professional from the Ministry of Economy and Finance (MEF), will assume this role to bring stability and expertise to the ministry.
Born in 1972 in Chieti and a graduate in Law from the University of Teramo, Gemignani holds an Executive Master in Public Administration Management from SDA Bocconi. She has served in various capacities within the MEF, including Deputy Chief of Staff and Director General of the Treasury Services Department. Additionally, she has been involved in human resources management and has held positions in various governmental bodies, demonstrating her extensive experience in public administration.
Graziano Lardo, 57, has been appointed as the new General Director of Research and Innovation in Health at the Ministry of Health, succeeding Giuseppe Ippolito, who recently retired. Previously a director at the Ministry of Economy and Finance (MEF), Lardo has a diverse professional history. He served as the Director of the State Accountancy Office for the Potenza/Matera. The General Directorate he will oversee is part of the Department of Prevention, Research, and Health Emergencies, which includes the General Directorate of Prevention, currently led by Francesco Vaia.
Lardo shares regional ties with Maria Rosaria Campitiello, the head of the Department, and Edmondo Cirielli, the Deputy Minister of Foreign Affairs, all hailing from Salerno. This connection is highlighted by the fact that Lardo was appointed as the General Director of the Province of Salerno in 2010 by Cirielli, who was then the president of the province.
On November 12, Raffaele Fitto will undergo an oral examination before the European Parliament as part of the confirmation process for the 26 candidates for European Commissioner. This follows the submission of a letter of intent to the Legal Affairs Committee. In his written responses, Fitto emphasized policies related to cohesion, such as high-speed internet, 5G networks, and green and digital transitions, as well as the National Recovery and Resilience Plan (NRRP), highlighting both successes and challenges in Italy.
Fitto, the designated Executive Vice President for Cohesion and Reforms from Italy, will focus on the importance of the NRRP for both Italy and the European Union. He shared his experience as the minister responsible for implementing the NRRP—the largest in Europe—and his commitment to fostering economic growth in the EU post-pandemic. He also pledged to collaborate closely with Valdis Dombrovskis, the Commissioner for Economy and Productivity, to ensure the reforms and investments outlined in the European PNRR are achieved by the 2026 deadline.
On October 19, 2024, a historic G7 Defense meeting took place in Naples, marking the first time that defense ministers gathered specifically to discuss military capabilities within the G7 framework. U.S. Secretary of Defense Lloyd Austin described the meeting as “historic,” emphasizing its potential for future gatherings. Italian Defense Minister Guido Crosetto highlighted various global crises, including the ongoing war in Ukraine, tensions in the Middle East, and instability in sub-Saharan Africa.
The war in Ukraine was a focal point, with all G7 nations reaffirming their unwavering support for Ukraine against Russian aggression. NATO Secretary General Mark Rutte underscored the importance of collective defense efforts in Eastern Europe and expressed a commitment to enhancing industrial defense production to support Ukraine.
The meeting also addressed the situation in the Middle East, particularly condemning Hamas’s attacks and calling for an immediate ceasefire and hostage release. The G7 acknowledged the severe humanitarian impact of the ongoing violence and reaffirmed the need for adherence to UN resolutions advocating for a two-state solution.
Additionally, discussions on the Indo-Pacific region highlighted the necessity for stable relations with China amid concerns over Chinese expansionism and military collaboration with Russia and North Korea. The G7 recognized the importance of open dialogue to manage differences while stressing the need for enhanced defense capabilities in response to these geopolitical challenges.
The initial indications from Italy’s 2025-2027 Defense Budget Bill reveal a mix of advancements and setbacks, continuing a longstanding trend of inadequate investment in national defense. Despite ongoing global security challenges, such as the Russian invasion of Ukraine and conflicts in the Middle East, Italy remains one of the few NATO allies failing to meet the defense spending target of 2% of GDP.
Italy has committed to increasing military spending to 2% of GDP, a pledge made in 2014 with NATO. However, actual spending remains stagnant, lacking a credible growth trajectory that would indicate progress towards this goal. A concerning aspect is the extension of the “Strade Sicure” operation until December 31, 2027, which will allocate 6,800 soldiers to non-combat roles, undermining military readiness.
The budget proposes €1.345 billion for international military missions in 2025, a significant decrease from €1.570 billion in 2024. New allocations include €7.7 million annually for the NATO Innovation Fund and substantial long-term investments totaling €22.5 billion for national defense programs and €12.6 billion for interventions by the Ministry of Enterprises and Made in Italy.
For the eighth consecutive year, the Defense Function budget is set to grow, reaching approximately €22.87 billion in 2025, over €2 billion more than in 2024. This increase is expected to offset previous inflation impacts. While personnel costs are projected to rise to €11.34 billion, the actual number of military and civilian personnel continues to decline. The operational budget is also facing challenges, remaining marginal compared to overall spending.
On October 10, 2024, Italy convened the second G7 ministerial meeting on Industry and Technological Innovation in Rome. The Italian Minister for Enterprises and Made in Italy, Adolfo Urso, led three sessions alongside key officials, including U.S. Secretary of Commerce Gina Raimondo.
High-level representatives from G7 nations, such as Marc Ferracci (France), Peter Kyle (UK), Francis Bilodeau (Canada), Udo Philipp (Germany), and Margrethe Vestager, Executive Vice President of the European Commission, attended. Outreach countries like South Korea, India, and the UAE were also represented. Notably, the forum featured African nations.
Minister Urso underscored the gathering’s mission, remarking on the necessity for pragmatic solutions to economic growth in a volatile global environment.
Giorgia Meloni embarks on a visit to the Middle East, beginning with Jordan, where discussions will focus on enhancing regional alliances and addressing security issues related to Italian troops involved in international missions, specifically UNIFIL and the bilateral MIBIL mission.
Jordan, under King Abdullah II, has maintained stability amid regional tensions, particularly with neighboring Syria, Iraq, Palestine, and Lebanon. As the conflict intensifies in Gaza and Lebanon, Jordan faces the risk of a refugee influx. While there is public division regarding support for Hezbollah, there is unity against Israeli actions in Lebanon.
The visit also underscores the long-standing bilateral relations between Italy and Jordan, which include agreements on cooperation across various sectors. Both countries have collaborated on defense matters and humanitarian initiatives, such as the Italian-led “Food for Gaza” project aimed at delivering aid to affected populations.
The recent state visit of Emir Sheikh Tamim Bin Hamad Al Thani to Italy marked a significant step towards enhancing bilateral cooperation between Italy and Qatar. During discussions with Italian Prime Minister Giorgia Meloni, key issues such as migration, the Middle East situation, and the Mattei Plan for Africa were central to their agenda. A joint declaration was signed, emphasizing the goal of establishing a truly strategic partnership.
Both leaders reaffirmed their commitment to UN peacekeeping efforts, particularly regarding the UNIFIL mission in Lebanon, underlining the need for security in the area. The joint declaration reflects a mutual desire to deepen cooperation across various sectors, including political stability in Libya and a just resolution in Ukraine.
Migration was identified as a global challenge necessitating collective action and innovative solutions. The two nations agreed to promote joint migration partnerships with countries of origin and transit within the framework of the Rome Process. On Africa, both leaders are committed to fostering equitable and strategic relationships, particularly through the Mattei Plan, focusing on sustainable agriculture and job creation.
On October 29, 2024, the Italy-Libya Business Forum held in Tripoli marked a significant step in the economic relations between the two countries, focusing on bilateral cooperation in key sectors such as health, infrastructure, and energy. The visit of Italian Prime Minister Giorgia Meloni, accompanied by Minister of Enterprises and Made in Italy Adolfo Urso, underscored the commitment to re-establish commercial dialogue.
A major highlight of the forum was the announcement of direct flights between Italy and Libya, set to resume in January 2025, facilitated by ITA Airways. The two nations have witnessed a notable increase in trade, with commercial exchange growing from €2.6 billion to €9.1 billion between 2020 and 2023, and expectations for further growth in 2024.
Among the agreements signed was one involving Todini Costruzioni, selected to undertake two sections of the Libyan Coastal Highway, an important infrastructure project that reinforces Italy’s presence in Libya. The cooperation between Italy and Libya extends beyond mere commercial interactions, aiming for a broad and structured partnership that fosters sustainable economic and social development for both nations. Support from Italian institutions like ICE, SACE, and SIMEST provides guarantees and financing for investments in Libya.
The Italian economy is poised for moderate growth in the next two years, driven by several favorable factors. Expected positive influences include a rebound in international trade, easing monetary policy, gradual recovery of household real disposable income, and progress on the National Recovery and Resilience Plan (NRRP), which has already seen significant spending. The latest forecasts indicate a slight downward revision in growth expectations, with GDP anticipated to grow by 0.8% in 2024 and 0.9% in 2025, down from earlier estimates. This follows a growth rate of 0.7% in 2023. Economic growth is primarily fueled by the services sector, while industrial production and investments are experiencing declines.
After years of robust investment growth, a flattening trend is expected in 2024, with a decrease projected for 2025, particularly in residential construction, which will feel the impact of reduced incentives. Non-residential construction is anticipated to benefit from PNRR funding, and machinery investments are expected to recover as the economy stabilizes.
The labor market shows a slight decrease in hours worked per employee, with expected improvements in productivity and real wage recovery. Overall employment is projected to grow at a faster pace than economic activity, although the number of hours worked is likely to decline due to structural shifts towards service industries.
The Italian government will launch a state-owned company by the end of the year, dedicated to constructing advanced third generation and eventually fourth-generation nuclear reactors, announced Minister of Enterprises Adolfo Urso. Urso outlined that a legislative framework will be introduced to allow Italy to re-enter nuclear energy, a sector abandoned after the 1987 referendum, confirmed again in 2011.
Key partners for this nuclear endeavor include French firm EDF and American company Westinghouse, alongside Italian players like Ansaldo Energia and the UK-based Newcleo. Ansaldo Energia, through its nuclear division, is already collaborating with EDF and Westinghouse on small modular and fourth-generation lead-cooled reactors. Newcleo, an Italian-founded startup, specializes in fourth-generation reactors and is active in France to secure easier access to funding.
The Italian government has launched an administrative procedure to investigate a potential violation of the Golden Power regulations by China National Tire and Rubber Corp. (CNRC), a major Chinese shareholder in Pirelli.
According to a statement from Pirelli, this decision follows the issuance of a notice on October 31, 2024, indicating that the government will examine whether CNRC has breached the provisions set forth in a June 2023 decree. These provisions mandate an absence of functional or organizational ties between Pirelli and CNRC. The review is said to focus on the dual roles of certain Pirelli board members who may also hold management positions in companies that control Pirelli. The Italian Prime Minister’s office has set a deadline of 120 days for concluding the procedure.
This investigation follows significant recent shifts in Pirelli’s shareholder structure, including Brembo’s recent sale of its 5.58% stake, which was followed by increased shares held by Camfin and Mtp, aiming to reach a 29.9% ownership. Currently, the Chinese ChemChina group holds a 37% stake in Pirelli. The situation underscores a delicate balance within Pirelli’s ownership, with the Italian shareholders actively reinforcing their position amidst regulatory scrutiny.
Cassa Depositi e Prestiti (CDP) has confirmed the leadership team of Open Fiber, in which it holds a 60% stake. Following the expiration of the management’s mandate in June, the assembly approved the 2023 financial statements and renewed its confidence in the current executives. CDP’s board, chaired by Dario Scannapieco, expressed full support for President Paolo Ciocca and CEO Giuseppe Gola. Macquarie, which holds the remaining 40% of Open Fiber’s shares, has also reaffirmed its confidence in the management team, specifically endorsing CFO Andrea Crenna, as well as key managers Stefano Mazzitelli and Nicola Grassi.
The confirmation of leadership marks a significant advancement for Open Fiber as it plans to secure a major financing of €1.05 billion to support its expansion activities. The financing will be divided between CDP, contributing €570 million, and Macquarie, investing €380 million.
Enel posted a net profit of €5.8 billion for the first nine months of 2024, a 16.2% increase from the previous year, primarily fueled by renewable energy growth. The company’s base EBITDA rose by 6.5% to €17.45 billion, exceeding market expectations. Despite a 17.1% decline in revenues to €57.6 billion—attributable to reduced demand for thermal power and lower retail energy prices—Enel’s strong renewable output and resilient distribution network helped offset these challenges. The company reduced its net debt to €58.2 billion, down 3.3% from the end of 2023, supported by operating cash flow and proceeds from strategic divestments. Enel reaffirmed its 2024 guidance.
In addition to its renewable growth, Enel is exploring the potential of small modular reactors (SMRs) in partnership with Ansaldo and Leonardo, marking a possible shift towards nuclear innovation.
Eni has finalized an agreement to sell its Alaskan oil fields, Nikaitchuq and Oooguruk, to U.S. energy company Hilcorp for $1 billion. This divestment aligns with Eni’s strategy to optimize its upstream portfolio by reallocating resources from non-core assets, focusing instead on high-potential areas. The sale, approved by regulatory authorities, supports Eni’s plan to achieve net proceeds of €8 billion from its 2024-2027 plan, targeting asset sales, equity reductions, and new capital sources to fund energy transition projects.
On October 24, Eni announced an agreement to sell 25% of Enilive, its sustainable mobility and biofuels subsidiary, to U.S. investment firm KKR for €2.9 billion. The transaction, in line with Eni’s satellite strategy, aims to enhance Enilive’s independent growth and attract strategic capital. The investment involves a capital increase and subsequent share purchase, valuing Enilive at €11.75 billion.
At the Euronaval exposition in Paris, Italian shipbuilding group Fincantieri and UAE-based defense conglomerate Edge signed a Memorandum of Understanding (MoU) to deepen their partnership in underwater and unmanned systems. Building on a joint venture initiated earlier this year, the MoU outlines cooperation on advanced underwater technologies for both crewed and unmanned systems in the UAE. The agreement, signed by Fincantieri CEO Pierroberto Folgiero and Edge CEO Hamad Al Marar, aims to address complex underwater challenges, from hydrodynamics to autonomous communication.
In the first half of 2024, Ferrovie dello Stato (FS) posted significant revenue growth, with operating income reaching €8 billion (up 13% year-over-year). EBITDA rose 3% to €1 billion, and EBIT increased 10% to €109 million. However, FS reported a net loss of €199 million, largely due to a €153 million provision linked to a recent court ruling concerning its subsidiary, Ferrovie del Sud Est.
Despite challenges, FS achieved revenue gains across its divisions. Trenitalia, the group’s passenger rail service, led the growth with a resurgence in travel volumes, while FS Sistemi Urbani‘s sale of railway sites in Milan generated an additional €118 million. Operating costs also rose by 15% to €7 billion, driven by personnel costs and investment-related expenses.
The anticipated agreement between Italy’s Ministry of Economy and Finance and Lufthansa for the acquisition of Ita Airways recently stalled unexpectedly. Reports indicate the breakdown stemmed from disagreements over the sale price, which emerged late in negotiations. This clash over financial terms jeopardized the broader arrangement, which also involved the transfer of certain flight slots to maintain EU-mandated competition levels, with other airlines such as EasyJet, Air France-KLM, and British Airways in line to receive these slots.
This issue echoes past derailments in the Italian aviation sector, including prior unsuccessful bids by MSC, Cerberus, Air France, and KLM, casting a shadow over Ita Airways’ journey toward stability through a reliable international partnership.
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