Reading Time: 30 Minutes

Disclaimer:

This Report is proprietary and confidential and may not be copied, quoted, referenced, or distributed in any format without the express written approval of Haizum Strategic Government Affairs (“Haizum”). Any violation of the foregoing may result in material harm to Haizum. The views expressed reflect public information or the personal views of the members of Haizum’s Team and in case reflect the view in a general context as expressed in the newsletter and may not represent a view on a specific case. Views expressed are as of the date hereof and Haizum does not undertake to advise you of any changes in the views expressed herein. Opinions or statements regarding financial market trends are based on current market conditions and are subject to change without notice. It should not be assumed that Haizum has made or will make investment recommendations now or in the future irrespective of the views expressed herein. Haizum does make any representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this newsletter and nothing contained herein shall be relied upon as a promise or representation whether as to the past or future performance. Certain factual information contained herein has been obtained from third-party sources. It has not been independently verified by Haizum and although Haizum believes it to be reliable, Haizum makes no representation as to its accuracy or completeness.

This Newsletter is intended solely for informational purposes. It is not investment advice and should not be considered to be a recommendation to buy or sell any types of securities or investments or as an indication that any security is suitable for a particular person. Haizum also may have potential conflicts of interest, including that some of Haizum’s officers, directors and/or employees may be investors in the securities directly or indirectly. No assurance can be given that any risk management framework described herein will achieve its objective.

SUMMARY

For Italian politics, 2022 was an important year: the Draghi government crisis, general elections, and the new right-wing government led by Giorgia Meloni. 

There are five main aspects that have characterized the activity of the new government until now:

1. The first one is the rebalancing within the Italian right: Meloni has established herself as the coalition and government leader.
2. The second important aspect is the relation with Europe carried out by Giorgia Meloni. She is sending reassuring messages to Brussels. 
3. The third fundamental aspect lies in the budget law, where continuity with Mario Draghi‘s macroeconomic approach has prevailed. Regarding the deficit, the lines agreed with Brussels were respected. It is not a coincidence that the spread with German Bunds is at one of the lowest levels.
4. The fourth aspect is represented by the tensions with France over migrants. The government has adopted a more assertive and tough stance on immigration that has led to a harsh reaction from Paris, forced to accept an NGO ship in its ports. The Italian government has been open to finding negotiated solutions, obtaining for now an action plan from the EU Commission and a formal commitment from the other EU countries to tackle the migration problem collegiately (see Pact on Migration and Asylum – way forward discussion paper). 

5. The fifth and final relevant aspect lies in the continuity of foreign policy with Draghi‘s one. This is true for military support for Ukraine and for limiting Chinese action in Italy and for energy issues. In this latter field, the trend to diversify suppliers goes on, while the price cap proposal on gas remains the card played by Italy in Europe.

Moving forward, 2023 will open with four main political risks:

1. The first one is the implementation of the Recovery Plan, to be reshaped due to inflation and energy costs.
2. The second risk lies in the industrial policy. There are many corporate issues in which the government is involved: Monte dei Paschi, Ita Airways, TIM, Open Fiber, Priolo’s Lukoil and Acciaierie d’Italia. The government is either interested in ownership handovers or is directly a shareholder or creditor in these companies, but the coffers of the Italian state are not enough. Cassa Depositi e Prestiti has spent too much on acquisitions in past years, particularly on ASPI (Autostrade per l’Italia), and other companies participated by the state are too weak and bureaucratic. 
3. The third risk is related to the realization of key infrastructures needed to achieve diversification of energy supply, such as regasification plants and viaducts. In Italy local politics has always had strong veto powers. Opposition from regions and municipalities, even those of the same political origin as the government, may be a problem for the implementation of this crucial infrastructure.
4. Lastly, the uncertainties in the international environment: a prolonged energy crisis, growing US protectionism and the ECB‘s raising of interest rates could represent an obstacle for the government in managing finances. Indeed, the weight of public debt on the Italian economy combined with other risks, could push Italy toward a more restrictive policy.

INSTITUTIONS

GOVERNMENT

Minister Crosetto: crucial connections and a fresh approach

To understand the Minister of Defense connections, one must go back to the late 1980s. He was one of four figures who emerged among the youth of the Christian Democrats, which are now leading figures in the public arena. There was Dario Franceschini, longtime Minister of Culture; Simone Guerrini, now Director of the Secretariat of the President of the Republic Sergio Mattarella. Finally, Franco Gabrielli, Delegated Authority for the Security of the Republic in the Draghi government. 

Guido Crosetto has begun a revolution to shake up the Ministry of Defense. Zero delegations and zero trusteeships on major issues on one of the nation’s most strategic compartments. And then constant talks with the top brass and restricted meetings to delve into the most important issues on the table: from the war in Ukraine, to relations with European partners, to the acceleration to decide on programs on the renewal of national armaments.

NRRP implementation issue and the continuity with Draghi

When it comes to NRRP, one has to focus on the Ministry of Infrastructure, now headed by Matteo Salvini, which will have the largest share of the resources and the responsibility in delivering huge infrastructural projects (roads, bridges, railways, etc.)

To bring the Plan to fruition, 13-15 thousand professionals would be needed: project/program managers, administrative and accounting managers… with an investment around 14 billion, 6-7% of the total resources between NRRP and the New Skills Fund. But in the 146 calls for experts published on the public administration recruitment portal, only 1,161 experts have been hired to date.

 

PARLIAMENT

FdI’s Marco Osnato for Finance Committee

Marco Osnato was chosen to lead the House Finance Committee under Fratelli d’Italia. A weighty appointment for the 50-year-old born in Belluno in 1972 but raised as a pillar of the Lombard right.

Conflict over Matteo Renzi in the Center Right

A political rift has opened in the center-right over the role Matteo Renzi might play in this parliamentary term. On one hand, there are a handful of Forza Italia survivors who are eager to join the Third Pole, while expressing a certain dislike for Carlo Calenda. On the other, there is the “No Renzi” front led by Melonians Donzelli, Lollobrigida and Fazzolari.

The anti-Renzi bloc in the majority is welding with the Democratic Party to bring home a law that would prevent men in the institutions, MPs in the lead, from doing business with foreign countries (in the United States such a law exists and is also very restrictive).

Democratic Party’s factions prepare for the party congress

Three candidacies currently on the table, many bigwigs still undecided, and several unknowns on the horizon. The names in the field are those of Stefano Bonaccini, Elly Schlein, Paola De Micheli and Gianni Cuperlo. Between backtracking (that of Florence Mayor Dario Nardella, who eventually dropped out of the race and made official his support for Bonaccini) and rethinking (that of Pesaro Mayor Matteo Ricci), one of the few certainties is that the future party leader will descend from Emilia-Romagna: Stefano Bonaccini, Elly Schlein are respectively Governor and Deputy of that region. MEP Brando Benifei, promoter of CoraggioPd, the assembly of Dem activists, administrators and leaders under 40, is still thinking about joining the race and wants to take his time, as the deadline for nominations is Jan. 27.

The support for Bonaccini by the Reformist Base faction headed by former Defense Minister Lorenzo Guerini is not surprising. Whereas it is surprising the support for Schlein by Dario Franceschini, who leads Areadem. At the same time other party leaders and bigwigs remain still. With the exception of the outgoing secretary Enrico Letta, who is silent in order to maintain a role as guarantor of the congress. He certainly sympathizes with Elly Schlein, but has not uttered a word. Still remaining in the leftist area of the PD, apart from Giuseppe Provenzano who has sided with the OccupyPd champion, there is Andrea Orlando who is still stalling.

 

From the Left: Bonaccini, Schlein, De Micheli, Cuperlo

 

 

 

The so-called Third Pole may split up

The so-called Third Pole is splitting between a strand supporting Prime Minister Giorgia Meloni and another sympathetic to Silvio Berlusconi. For now, the contradiction does not produce destabilizing effects. But it could in the near future become an element of tension, if not a reason for rupture.

To be benevolent, one may think of a cunning partisan game to divide the executive parties and take all possible advantages. A hint of malice, however, leads one to suspect a creeping competition in the Third Pole.

JUDICIARY

Qatargate

The European investigation outlines a web of corruption created by Antonio Panzeri when he founded Fight Impunity in Brussels in 2019 after failing to be re-elected. A clearinghouse for bribes, originating from Qatar and Morocco and distributed in the EU Parliament after transiting from the NGO’s bank accounts. For the time being, it is the Italian and Belgian Socialist MEPs in the crosshairs. But in the web there is “an indeterminate and very large group of persons operating within European structures”. Italian judges proceeded with search and seizure orders based on the European investigation order sent to Milan.

The 1.5 million euros in cash found in the home of former PD MEP Pier Antonio Panzeri and former vice president of the European Parliament Eva Kaili was not meant to stay in bags. It would not be limited only to the four detained but would concern several MEPs on the Qatari payroll. It is one of the hypotheses in the Brussels federal prosecutor’s investigation into alleged bribery to ‘moderate’ the European Parliament’s stance on human rights abuses in the Gulf emirate.

Qatari investment in Italy concerns an extremely problematic field: radical Islamism. For years, Qatar has been financing the large-scale construction of Islamic centers throughout Europe.

STRATEGIC ISSUES

NATIONAL SECURITY

A cloud for the Public Administration

The National Strategic Pole (PSN) infrastructure will be built by the Tim, Leonardo, CDP Equity and Sogei consortium, with funds from the NRRP. When fully operational, 75% of Italian government data is expected to migrate to the cloud by 2026.

Undersecretary for technology Butti (FDI) raised concerns, however, about the implications of the US Cloud Act in relation to data hosted in Psn’s four data centers. The latter may allow US justice or intelligence agencies to access data hosted outside the United States in some cases. The cloud behemoths (Google, Amazon and Microsoft) are in fact not cut off from the National Strategic Hub.

With the activation of the National Strategic Pole, the first milestone of the NRRP included in Mission 1, Component 1, Investment 1.1 “Digital Infrastructure” is completed on schedule. Now begins another central phase, that of the migration process on the new infrastructure of the 280 perimeter administrations.

More than half of Italy’s 5G is in the hands of China

According to a Strand Consult report, 51% of the Italian 5G network components are Chinese (Huawei and Zte). And again, this figure is up from the 2020 4G survey, when the %age was 41%.

Tim has confirmed its commitment to gradually reduce equipment “made in China” from its network infrastructure. The annual plan, approved by the Draghi government in one of the last meetings of the Council of Ministers, provides for: for the core part, 100% use of equipment from Sweden’s Ericsson; for dedicated private networks there is Italy’s Athonet; currently Ericsson is at 53%, Finland’s Nokia 27% and Huawei 2%. 

PUBLIC ORDER

The next generals of the Carabinieri

Starting next year, the Carabinieri will have five new army corps generals. Starting Jan. 1, division generals Salvatore Luongo (head of the Defense Ministry’s legislative office), Mario Cinque (current chief of staff of the Arma), Antonio De Vita (now the head of the Lazio Legion) and Maurizio Stefanizzi (commander of the Marshals School) will put on their third stars. They will also be joined by Giovanni Truglio (currently head of the Weapon’s Specialized Units Division and formerly head of the Sardinia Legion) as of July 1.

The Guardia di Finanza at the center of the big appointment game

The Guardia di Finanza will be a major player in the round of key companies’ appointments that opens in 2023. The Yellow Flames itself is involved in the round, General Giuseppe Zafarana being close to expiring in May after the one-year renewal provided for in the Milleproroghe Decree of 2021. In addition, many high-ranking members of the Guardia di Finanza who have moved on to the world of public administration and companies are now in full swing.

The one who has a very good chance of getting a key position is Giuseppe Lasco, a former Guardia di Finanza officer who has been engaged in a gradual rise inside Poste Italiane since 2017. In fact, it is said that Matteo Del Fante, currently Poste CEO, is among the candidates to become Enel CEO. Lasco would bring to the top management of Poste major changes from the point of view of organization and would finally lead an apparatus that he himself has helped to strengthen. The “finance party” is aiming for a one-two punch if Luciano Carta were to be transferred from Leonardo to Poste Italiane for the presidency, but for the former Aise director the odds are not high.

Luigi Della Volpe is the Guardia di Finanza general who has held the position of deputy director of the external service since 2021: along with Lasco, Carta and Zafarana, he is one of the key profiles. Also appreciated by the corps and given on the launching pad for crucial roles are the commander of the Special Units, Army General Umberto Sirico, and the former head of the Central Organized Crime Investigation Service Alessandro Barbera, who in the field has earned the stripes as a valuable investigator for the management of the post-Covid emergency phase.

Flussi Decree Novelty

Eighty-two thousand entries of foreigners into Italy for work. This is what the new Flussi Decree provides for. The numbers are at last year’s level, but the novelty it contains is explosive: as announced by Interior Minister Matteo Piantedosi, in order for an employer to get the green light for foreign labor, usually a seasonal worker, first there will have to be a check on who is living on citizenship income (Reddito di cittadinanza).

DIPLOMACY

Meloni’s Atlanticism travels on Fazzolari-Giorgetti-Tremonti axis

Giovanbattista Fazzolari, Undersecretary at the Presidency of the Council very close to Giorgia Meloni, is the one who has long kept in touch with Washington. He mediates, weaves relationships and above all reminds the American ally that FdI is different from Fidesz, Viktor Orban‘s Hungarian party.

Giancarlo Giorgetti, now Minister of Finance, dialogues on behalf of the pro-government Lega with which the Fratelli d’Italia leader has made an ironclad pact. He moves carefully, trying to preserve the bridge created over the years with the star-studded financial, political and economic world. The Atlantic faction then naturally includes Alfredo Mantovano, undersecretary for Security to the presidency of the Council. 

Acting as the “noble father” in these operations is Giulio Tremonti, who has been elected chairman of the Foreign Affairs Committee, a crucial junction on a par with the Farnesina headed by Antonio Tajani. Among other things, the former economy minister upgraded Giorgia Meloni‘s Atlantic credentials by introducing her to the Aspen Institute.

 

From left: Fazzolari, Giorgetti, Tremonti, Mantovano (Tag43)

Italy and its role in the group Quint

 

Wendy Sherman, US deputy Secretary of State had an off-schedule meeting with Antonio Tajani at the Minister of foreign affairs. The number two US diplomat was supposed to see Ambassador Francesco Talò, diplomatic adviser to Prime Minister Giorgia Meloni, and Ettore Sequi, secretary general of the MOFA (her counterpart on a daily basis) in Rome. Tajani and Sherman discussed, a US diplomacy note reads, “the further deepening of our alliance to address global challenges, including energy security and our opposition to unilateral efforts to change the status quo in the Taiwan Strait”.

The meeting has been the occasion also to affirm the willingness to strengthen the group Quint. It is an informal decision-making group composed of the United States and the Western European Big Four (France, Germany, Italy and the United Kingdom), that operates as a “directorate” of various entities such as NATO, the OECD and the G7/G20.

AEROSPACE & DEFENSE

A new Italian consortium for Iride satellite constellation services

Four companies spread across Italy have decided to join forces to develop advanced space technologies and services destined for the future all-Italian satellite constellation called Iride, whose first satellite launch is scheduled for 2025. D-Orbit, Exprivia, Planetek Italia and Serco Italia are to set up the ad hoc consortium called Osiride (Operational Solutions for Iride) so as to foster the emergence of new ideas, start-ups and innovative approaches. Thus, Osiride aims to extend the benefits of Iride to a broad business ecosystem of SMEs and start-ups in all regions of Italy.

Italy-Qatar ties go through defense. Crosetto’s visit to Doha

Cooperation in the field of Defense and strengthening the means necessary for the country’s security. These were the topics discussed during Defense Minister Guido Crosetto‘s two-day visit to Qatar. The Minister was the guest of his counterpart and Deputy Prime Minister Khalid bin Mohammed Al Attiyah, during which the main issues of international security were addressed. 

The one with Qatar is a long-standing relationship in the field of defense. In 2016 a four billion euro contract was signed with Fincantieri for seven ships (four corvettes, one Lpd amphibious ship, two Opv deep-sea patrol vessels and related support services) and the possibility of ordering new units in the following years. An order also won by Leonardo, Elettronica and MBDA (which will supply Qatar with Mars ER anti-ship missiles for both coastal batteries and NH90s sold by Leonardo). The signing of the agreement had followed President Sergio Mattarella‘s visit to Qatar by a few days and gave a signal of the now-established relationship between the two countries in the defense sector. Last April, the Damsah, the second of four Al Zubarah-class corvettes commissioned from Fincantieri by the Doha Defense Ministry, was delivered.

The Tempest Revolution, an alliance for the new 6th generation fighter

Italy, the United Kingdom, and Japan have formed an unprecedented defense alliance to develop and build the fighter jet of the future, a sixth-generation supersonic jet intended to replace the current Eurofighter Typhoon. The new fighter aircraft will be called the Tempest and is expected to be operational in 2035, with the development phase starting in 2024. 

It is very significant that the agreement was communicated by the Presidency of the Council of Ministers. This is the first time in Italian history that a decision on Defense systems has risen to that level. And this corresponds to the will of Defense Minister Guido Crosetto to require the involvement of the entire Italian government and not just the Ministry, Tempest being a strategic choice.

 

 

The failure of Avio’s first commercial Vega C flight

The first commercial flight of Vega C, the upgraded version of the European Vega launcher built by Avio at its Italian facilities in Colleferro, failed. About 2 minutes and 27 seconds after liftoff, an anomaly occurred on the Zefiro 40 (second stage), ending the Vega C mission.

The failure of the Vega C deals another blow to European efforts to maintain launch autonomy. The Vega C was one of the cornerstones of that strategy, along with the Ariane 6 still under development, with the European Union awarding Arianespace a contract Nov. 29 for five Vega C launches of Sentinel satellites.

The launch failure also hurt Airbus, which was counting on the launch to upgrade its constellation of Earth observation satellites. Pléiades Neo 5 and 6 were similar to the previously launched Pléiades Neo 3 and 4, but included laser links for faster image transmission.

ECONOMY & FINANCE

How banks’ profits grow

An analysis of the financial statements of Intesa Sanpaolo, Unicredit, Montepaschi, Banco Bpm, Fineco Bank, Bper, Credito Emiliano, Banco Desio, and Banca Popolare di Sondrio, shows a total of nearly 10 billion in profits. Leading the ranking are Intesa Sanpaolo and Unicredit, with 3.28 billion and 3.99 billion, respectively. Sharp decline for Montepaschi to -361 million from 388 million in the first nine months of 2021 due to the ongoing restructuring operation. Another extraordinary transaction-namely, the completion of the Carige merger-is in Bper, which is up from 586 million to 1.46 billion. Profit is also up in Banco Bpm to 510 million from 472 million, in Fineco Bank to 302 million from 289 million, and in Popolare di Desio to 64 million from 56 million, while it gives way in Credem (to 223 million from 276 million) and Popolare di Sondrio (to 151 million from 201 million).

Postponed ratification of the European Stability Mechanism (ESM)

After the recent green light from the German court, Italy remains the last country in Europe not to have ratified the treaty. And it is not likely to do so in the coming weeks. The parliament majority is divided; Economy Minister Giancarlo Giorgetti threw the ball forward again. Highlighting the need for parliamentary debate before proceeding to ratification, the minister stressed that “we are aware of the commitment made by Italy and that at present all other adherents have proceeded to ratification.”

Lagarde explained that Italy is the anomaly. Crucial issue, says Frankfurt’s number one, for the completion of the banking union. From the ECB, they explain that in the message “there are no political connotations” and “no indications,” but rather a recognition of a fact, namely that one of the six founding countries of the EU is the last to address the issue.

This was enough to set off an uproar in Rome. On a more technical note, the failure to pass the reform of the ESM does not affect being able to count on the ECB’s protective umbrella. As in the case of the Outright monetary transactions (OMTs), the special securities purchase operations launched by Mario Draghi in 2012 at the time of “Whatever it takes“.

Excellent health for state-controlled or state-invested companies

The 34 industrial and service companies controlled by the state, through the Ministry of Economy and Finance, show that they have overcome the difficult period of the pandemic and face with good prospects the uncertainties arising from rising commodity costs, inflation at its peak, rising interest rates, and a slowdown in consumption.

This is basically what emerges from the latest report of the Comar study center: the fourth edition of the “Report on the Financial Statements of State Owned Companies 2017-2021” in the comparison between the end of 2021 and 2020, with forecasts for 2022.

Risk of stagnation grows

Increasing risk of stagnation for the Italian economy: gas prices are rising again, and high energy prices have been increasing costs for 12 months now, mitigated, only in part, by government interventions; inflation at highs and persistent will curb consumption; rising rates are becoming more pronounced and ballasting budgets.

Gas prices in Europe rose again in December (137 euros/mwh on average, up from 96 in November); difficult EU negotiations on a price cap, proposed at an even higher level, did not help. Oil, on the other hand, fell sharply in December, to $81 per barrel (from $91), in the wake of a well-supplied world market. The decline in non-energy commodities seems to have stopped (+0.7% in November), on the high levels touched in 2021 (+37% since the end of 2019). 

The cost of credit for Italian companies soared in October: 3.14% for SMEs from 1.74% at the beginning of 2022, 2.19% for large ones from 0.76%. This cost increase will negatively affect investment. The BTP, which had been declining since mid-October (3.49% in December, from a peak of 4.69%), rebounded to 4.06% following the rate hike decided by the ECB on Dec. 15 (to 2.50%).

Data show continued expansion of employment in Italy in the September–October period (+0.3% over July-August, +79 thousand). Employment moderately up in industry as well, in October (data from mandatory reports) and November (according to PMI).

Italian exports open the 4^th quarter poorly: -1.6% in October (after +1.6% in September). Wide differences are observed between sectors and destination countries: pharmaceuticals in robust expansion, transport equipment on the rise, machinery weaker; sales in the US and Turkey are driving, sluggish sales in China and especially Japan. Negative signals from foreign manufacturing orders in November consolidate, due to weak global demand and geoeconomic uncertainty. 

Data from Confindustria

ENERGY

Piombino regasification terminal

The Piombino council approved the resolution officially mandating the lawyer to file the appeal to the Tar (Administrative Court) against Snam‘s 300-meter-long and 40-meter-wide floating regasification terminal that is supposed to be placed in the port. For the city mayor Francesco Ferrari (FDI) “with the great efforts and determination of the whole city, next week the lawyer Greco will file the appeal.” One assumption emerges from the appeal, which relies on the municipality’s logistical and environmental alarms, that the regasification terminal will not only not be ready in time, but the operation that aims to import 5 billion cubic meters of gas, the purpose for which it should be placed in the port, will be less than expected.

No precautionary suspension of the issuance of a permit for the construction of the regasification terminal. This was decided by the Lazio Regional Administrative Court in an order in which it rejected the request of the Municipality of Piombino. A hearing to discuss the appeal on the merits has been set for March 8.

 

Meloni government’s plan for Isab (Lukoil) in Priolo

ISAB in Priolo Gargallo, Sicily: it is one of Europe’s largest refineries, employing a thousand people, meeting 20% of Sicily‘s electricity demand and alone worth more than a fifth of national refining capacity. The plant is owned by the Russian oil company LUKoil, and this link prevents ISAB from obtaining the necessary credit from banks to purchase barrels from non-Russian sources (LUKoil has not been sanctioned, but financial institutions prefer not to engage with Russian entities). As a result, today Russia’s share of total oil imported by ISAB is over 90 %; before the war it was 30%.

There are two options available to unblock the situation: nationalize ISAB, or sell it to a non-Russian private entity. The previous government of Mario Draghi chose not to proceed with nationalization, banking on the second option. The US investment fund Crossbridge Energy Partners had shown interest in buying the plant.

The government headed by Giorgia Meloni drew up a plan to put ISAB in trust and temporary administration to avoid its closure due to the impending European oil ban. The trusteeship will last for one year, extendable once for another 12 months, and is effectively a nationalization, albeit not a formal one.

Russian Ship Akademik Pashin got close to TAP pipeline

A provocative mission to the Otranto Channel, where networks transporting gas, energy and internet traffic between Italy and the Balkans are concentrated. The “Akademik Pashin” remained for hours practically stationary at the most sensitive point: the one where the pipes of the Trans Adriatic Pipeline, the Tap that conveys alternative methane supplies to Russian sources, are located. This is a very special ship: a team supply ship, intended to accompany the long-range expeditions of Moscow’s fleet but often used to spy on NATO activities. Not surprisingly, the Akademik Pashin mission was triggered after the European decision to introduce a cap on gas prices to avoid Kremlin blackmail. A move that Putin’s spokesman called “unacceptable.”

Lithium in Italy, where the raw material is hidden

A recent study carried out by a team of researchers from the CNR‘s Institute of Geosciences and Georisources (Igg) defines the potential for lithium deposits to be found in Italian territory. Italy’s geological context is not the most favorable for conventional lithium deposits, although some situations in Sardinia, Calabria and the Alpine arc, it says, would merit further investigation. There is, however, a high potential for unconventional lithium resources in deep fluids that can be used sustainably and with low environmental impact.

The government launches the Center for Chips

The establishment of a center to promote design, strengthen training and ensure a research network by fostering innovation. 185 million is planned until 2030. It should be part of the new European network. There is also the establishment of an Italian Center for Semiconductor Integrated Circuit Design within the government’s amendments to the Budget Law.

Founding members are the Ministries of Economy and Finance (which is given oversight), Enterprise and Made in Italy, and University and Research. For the establishment of the foundation and its operation, capital expenditure of 10 million euros is authorized for the year 2023 and 25 million for each of the years 2024 to 2030 (185 million in total). An additional 30 million euros for 2023 and 40 million euros for 2024, 2025, and 2026 to ensure continuity of measures to support productive investments by micro, small, and medium-sized enterprises.

HEALTHCARE

Aifa, Italy’s drug agency, changes its structure

Aifa, Italy’s drug agency, is preparing to change its structure, starting with governance. The position of director general of the agency, who currently has all management powers of the agency and directs its activities and held at present by Nicola Magrini, will be abolished. Secondly, the Scientific and Technical Advisory Commission (TTC) and the Pricing and Reimbursement Committee (PRC) will be abolished, and their functions assigned to a new single commission called the Scientific and Economic Commission for Medicines (SCE) consisting of ten members in all.

TECHNOLOGY

What the Leonardo supercomputer will be used for

Leonardo, the 240-million-euro supercomputer (fourth in the world for speed and computing power) has been Inaugurated and installed in Cineca‘s data center at the Bologna Technopole. Intended for research projects, scientific and academic use. When completed, based on the “High-Performance Linpack” test, the supercomputer made by the French company Atos will in fact have a computing power of 250 petaFlops, 10 times more than the previous Cineca system, with a storage capacity of more than 100 petabytes.

Managed by Cineca, Leonardo is the result of a €240 million joint investment: €120 million allocated by the European Commission and €120 million funded by Italy through the Ministry of University and Research.

What’s missing for Intel’s chip factory in northern Italy

The change of government has caused an impasse for the $11 billion deal involving Intel‘s investment in Italy for a plant dedicated to the back-end (micro-assembly) phase of the chip-making process.

In the running are Veneto, which is playing the card of logistics links with Germany, and Piedmont, which is betting on proximity to big industry. But Presidential Decrees on state resources and declarations of useful publicity of settlement areas are missing.

STRATEGIC COMPANIES

ASSICURAZIONI GENERALI

Banca Generali, total net inflows at 501 million euros in November

Banca Generali released data on total net inflows for November, which stood at 501 million euros. This brings the total figure since the beginning of the year to 5.1 billion. A figure that is even more significant when considering the impact of tax maturities (235 million in the month compared to 165 million last year) typical of the month, net of which November is the best month in 2022 in terms of volume and product mix.

CASSA DEPOSITI E PRESTITI

CDP’s plans on energy

CDP has launched the “Energy Sector Policy” to better target its investments in the sector. Full details on the policy and progress in the 2022-2024 strategic plan. CDP has made it known that it will devote itself to activities that stimulate energy production from clean sources and improve socio-environmental adaptation capacities to the effects of climate change in Italy’s partner countries. 

CDP’s board of directors also approved new operations worth more than 2.8 billion euros-between loans and plafonds, both direct and “pooled” with other banks-that will go to support the sustainable and innovative development plans of small, medium and large enterprises. 

In the first ten months of 2022 CDP committed resources of 24.5 billion euros, 5 more than in the same period of 2021. The 2022-2024 strategic plan envisages a total commitment of 65 billion, of which 21 billion will go to strengthening infrastructure and public administration and 34 to businesses (also with a view to internationalization).

What’s going on in Ansaldo Energia?

Cassa Depositi e Prestiti is working on a new capital increase for Ansaldo Energia, the power plant company it controls with 88% of shares. Meanwhile, the reorganization of the management team has already begun. CEO Giuseppe Marino – who is working on the new business plan and debt renegotiation with banks – has been joined by Simone De Felice, who will be the chief restructuring officer.

The new CEO of Ansaldo Nucleare is expected to take office in January: Cassa Depositi e Prestiti has anticipated that he will have an “international” profile and will be tasked with “leading the revitalization” of the company. The development of Ansaldo Nucleare and Ansaldo Green Tech (the two subsidiaries most aligned with the transition process to low-emission sources) is at the center of Ansaldo Energia’s new business plan.

Specifically, the industrial plan aims to put Ansaldo Nucleare in a position to grab the renewal projects of European nuclear power plants dating back to the 1970s and 1980s. The company already has a presence in Romania, has signed a cooperation agreement with the US company Westinghouse Electric (which aims to build reactors in Poland), and is pursuing a project with Federacciai to build a plant in Slovenia.

ENEL

What Enel will do in Italy, the US and Latin America

Enel is planning to build a large solar cell factory (the devices that form photovoltaic modules, or panels) in the United States, filling a hole in the US supply chain: there is currently no production of these components in the country. In addition to cells, Enel’s plant will also make solar panels, for an initial capacity of 3 gigawatts that could reach 6 GW: the Italian company would become one of the most important players in the US solar industry. 

Enel’s investment in the United States has been boosted by the Inflation Reduction Act, the law signed last August by President Joe Biden that-among other things-allocates significant tax credits for those companies that make clean energy technologies such as batteries for electric vehicles, wind turbines and solar components.

FINCANTIERI

Fincantieri is ready to set sail in the defense business.

There are regions like Southeast Asia that will grow, there are many navies that want to strengthen themselves. Investment in ships gives the opportunity to defend trade, energy infrastructure and pipelines. There is a long industrial cycle and a deep market for Fincantieri in the defense sector. In this very direction, Fincantieri launched the multi-purpose offshore patrol vessel “Marcantonio Colonna” built in the Riva Trigoso (Genoa) shipyard. A new unit for the Italian Navy, fifth of seven commissioned. Of these two are already delivered, the “Morosini” and the “Paolo Thon Ravel“.

And in this route the Italian naval giant will be joined by Leonardo. Fincantieri and Leonardo converge on the need to take their collaboration a step further by continuing to leverage the joint venture Orizzonte Sistemi Navali (51 % Fincantieri, 49 Leonardo).

Marcantonio Colonna Vessel (Analisi Difesa)

Fincantieri, all the plans and the knot of debt

The shipbuilding group’s board of directors, chaired by General Claudio Graziano, approved the new ’23-’27 business plan and outlined by new CEO Pierroberto Folgiero. The CDP-controlled shipbuilding group aims to focus on building high value-added ships, digitizing production processes with a focus on costs and “financial discipline.”

According to the group, Fincantieri will return to profit by 2025, when revenues of 8.8 billion euros are expected (estimated at 9.8 billion in 2027). Over the three-year period, the company expects the Ebitda margin to increase from 7% to 8%.

LEONARDO

Leonardo billion-dollar acquisitions

Many acquisitions took place in the recent years within the Leonardo Galaxy. Here is a quick overview: the more than 100 million euros for Vitrociset, stealing it from the operation studied by Fincantieri and MerMec. There is the acquisition of a stake in Skydweller Aero Inc, an American-Spanish company. The one of Kopter Group AG (185 million euros) a Swiss company. The acquisition of Precision Aviation Services (2 million euros) followed by the acquisition of 70 % of the company Alea (another 3 million). Not to mention the 30% of GEM (5 million euros), a company from the Marche region with a turnover of about 15 million and profit of 700-800 thousand; with a commitment to acquire the rest by 2024. Finally, the Hensoldt deal: purchase of 25%, overpaid at 600 million in 2021, with a price of 23 euros per share.

Leonardo, what Drs will do with Rada at Nasdaq

Leonardo has announced the completion of the merger between its US subsidiary Leonardo Drs and Israeli company Rada Electronic Industries. This operation has allowed for the automatic listing of Leonardo Drs. Last June, the Italian aerospace and defense group had announced the merger of the two companies. Leonardo will continue to retain the 80.5% stake in Leonardo Drs through its US subsidiary Leonardo US Holding, while Rada’s current shareholders will be allocated the remaining 19.5 %. The merger is aligned with Leonardo’s strategic, commercial, and financial objectives, enabling the Group to achieve a unique positioning in the surface radar segment thanks to the synergy derived from its product portfolio together with that of Rada, Hensoldt and Gem.

Leonardo wins nearly €700m contract in Canada

This is a contract worth C$1bn, or €690m, to modernize (will reduce operating costs) and expand (to 16) the Canadian Armed Forces‘ fleet of Cormorant helicopters. Stock on the upswing in the stock market.

SACE

Sustainability and SMEs. Sace’s plan for the next three years

The insurance-finance group, controlled by the Ministry of Economy and Finance, lifts the veil on its 2023-2025 Business Plan. An Industrial Plan that marks a paradigm shift that will leverage several guidelines: starting with sustainability as a strategy.

Sace‘s commitment to Italian businesses will be reflected by the end of 2025 in 111 billion euros of supported investments, supported projects and guaranteed liquidity, with an expected annual increase of 5% and an average return for the country over the three-year period of more than 5%. These numbers underscore on the one hand the breadth of the intervention, which aims to serve 65 thousand SMEs, and on the other hand the sustainability and accountability in the management of public resources. The entire plan looks at the internationalization of Italian companies. The strategy points to a growth in the three-year period 2023-2025 of more than 30% in the volume of contracts insured and investments guaranteed in this area, amounting to about 49 billion euros. 

Another pillar, sustainability and transition. Support for competitiveness and sustainable growth in the domestic market, in fact, will be consolidated through more than 60 billion euros guaranteed in this area, supporting investments in high-impact sectors for the Italian economy and projects related to the green transition of companies and the country.

“Together 2025” – The new SACE Industrial Plan

SAIPEM

Saipem soars on the Ftse Mib

After the green light given by the Higher Council of Public Works, Rfi is ready to publish calls for tenders worth a total of 4.5 billion euros related to the development of the high-speed network between Salerno and Reggio Calabria and between Palermo and Catania. More specifically, the two calls for tenders will cover the first lot of the Salerno-Reggio Calabria worth 2.7 billion euros and the last lot of the Catania-Palermo worth 1.8 billion euros.

The contracts may involve Saipem, which has historically been active in these activities in Italy’s onshore E&C segment. Saipem is closing out 2022 with a sharply growing and very promising order book for the years ahead.

STELLANTIS

Why Stellantis looks to India for electric car production

The last major transaction was just over a month ago, which was the inauguration of a new software center in Bengaluru, Karnataka: the site will focus mainly on developing software and on technological innovation, aimed at the advancement of automobiles and mobility.

The company is working with Indian universities to consider developing industry-specific curricula to support ongoing expansion. Stellantis’ software-focused strategy involves deploying next-generation technology platforms, based on existing connected vehicle capabilities, to transform the way customers interact with their vehicles and generate 20 billion euros in incremental annual revenue by 2030.

According to the business plan, Stellantis plans to produce dozens of electric models over the next decade. For the Group, the decision to focus on India could be strategic because the Chinese market is not only now saturated, but Beijing is also preparing to flood the Old Continent with its vehicles 

TIM

Tim, Massimo Sarmi co-opted to BoD in place of Franck Cadoret

Massimo Sarmi, president of Fibercop, has been co-opted to Tim’s Board of Directors. The manager takes the place of the resigning Franck Cadoret, who represented Vivendi on the board. Sarmi, who has been chairman of the fiber company since November 2020, was ad of the Poste Italiane Group from 2002 to 2014. In 1995 he was the first general manager of Telecom Italia Mobile, the company created from the spin-off of the mobile radio division from Telecom Italia where Sarmi had worked since 1986; and in 1998 he was called to serve as general manager of Telecom Italia.

UNICREDIT

Unicredit, what’s behind Mercadante’s moves?

There are movements among Unicredit‘s shareholders. Consob, the stock exchange regulator, disclosed that Edoardo Luigi Raphael Mercadante is the second largest shareholder in the Milanese bank, with 4.8 %. In first place remains the US fund Blackrock, which holds 5.1 %; in third place is Germany’s Allianz with 3.1. 

Who is Mercadante? Insiders know little about him. The CEO of Parvus Asset Management is a Nice-born financier who holds dual Italian and French nationality. He previously worked for Merrill Lynch. Little is known about his fund, created in 2004, which does not work in Italy and therefore is not supervised by either Bankitalia or Consob. In Italy it operates more as a trust rather than a mutual fund. But Parvus, which manages more than 5 billion assets, is among the largest 500 hedges in the world. Its name appeared during Intesa’s Ops (public exchange offer) on Ubi. The most popular idea is that Andrea Orcel decided to reopen the aggregations dossier (BancoBpm) and that Parvus is ready to support the initiative. 

Unicredit with Azimut (to bring asset management revenues to Ireland)

After selling the fund factory, Pioneer, to the French Amundi in December 2016 under Jean Pierre Mustier, now Unicredit is returning to asset management with an all-Italian partnership. Azimut will establish and independently manage a company in Ireland that will develop investment products for distribution in Italy through Unicredit’s network on a nonexclusive basis. Funds for Italian clients are scheduled to be launched in the second half of 2023.

SOURCES