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Archive for 11. Dezember 2016

Italy’s New Prime Minister Paolo Gentiloni to Form New Government

Posted by hkarner - 11. Dezember 2016

Date: 11-12-2016
Source: The Wall Street Journal

Matteo Renzi resigned as prime minister last week after ‘no vote’ in referendum on constitutional reform

gentiloni-ccItaly’s newly named Prime Minister Paolo Gentiloni, has been charged with forming a new government.

ROME—Italy’s President Sergio Mattarella asked departing Foreign Minister Paolo Gentiloni to form a new government, likely bringing to a rapid close a political crisis triggered by a ‘no vote’ in a referendum on constitutional reform last weekend.

Mr. Mattarella gave Mr. Gentiloni the mandate to try to form a new caretaker cabinet. Mr. Gentiloni, 62, accepted and will begin consultations with political parties to put together his team of ministers. That list could emerge as soon as Sunday evening, setting the stage for the new government to seek votes of confidence in parliament by Tuesday.

Mr. Gentiloni said in a brief speech that he has accepted the mandate “with great honor and responsibility”. He added he’s aware of the urgent need to address the economic and social problems Italian citizens are facing and the country’s upcoming international commitments.

“I’ll be back to Mr. Mattarella [with a list of ministers] as soon as possible,” the premier-designate told reporters. Den Rest des Beitrags lesen »

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The Geopolitics of Populism

Posted by hkarner - 11. Dezember 2016


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The Complexity of Inequality

Posted by hkarner - 11. Dezember 2016


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Italy Is Up Against the Wall With Bank Bailout

Posted by hkarner - 11. Dezember 2016

Date: 10-12-2016
Source: The Wall Street Journal

Rejected extension for Banca Monte dei Paschi’s restructuring means tight deadline risks for investors

European regulators have rung the bell for Banca Monte dei Paschi di Siena, Italy’s third-largest and most troubled lender.

The bank asked for more time for the country’s political situation to settle down before it had to complete its €5 billion ($5.31 billion) recapitalization, which already looked difficult before Prime Minister Matteo Renzi lost a referendum this week and resigned.

The answer was no. This is most likely because European regulators worried that if they granted one extension from the Dec. 31 deadline, there was no guarantee that they wouldn’t be asked for another and another, all while allowing the problems of more Italian banks than just MPS to fester.

va-beneThe question now is whether MPS has enough time to complete its recapitalization and if it fails, what are the implications for retail investors in its junior bonds and for other Italian banks. UniCredit, Italy’s biggest bank, is expected to announce a plan to raise up to €13 billion of capital at an investor day on Tuesday.

There is a chance, although it is vanishingly small, that a new government is formed over the weekend that looks stable enough for large investors, including Qatari and U.S. funds, to commit to backing an MPS share sale. That would allow the bank to launch a wider public sale and see if it can meet its target.

The more likely outcome is some form of public cash injection. New European rules on how to deal with failing banks make it almost impossible to use public funds without imposing hefty losses on existing equity and junior debtholders. Den Rest des Beitrags lesen »

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