Tag Archives: Italy

Italy’s bank troubles test European Central Bank’s mettle

MILAN (Reuters) – The European Central Bank is trying to strongarm Italian banks into cleaning up their balance sheets, a year and a half after they fared the worst of all euro zone lenders in its first stress tests as overarching supervisor.

The banks have made scant progress on requested reforms, threatening to undermine a fragile recovery in the bloc’s third largest economy. They argue the ECB’s demands are unrealistic and delay the very consolidation the sector needs.

The standoff poses one of the biggest challenges to Europe’s central bank since it became the euro zone single banking regulator in November 2014. After Greek banks, Italian ones are now taking up most of its time.

Banks like Carige and Monte dei Paschi di Siena have their liquidity monitored daily and the ECB, working in teams with Italy’s central bank, is firing off missives telling lenders to raise capital, find a buyer and sell off bad loans.

“They phone, they e-mail and they come down to see us,” said a source at one Italian bank, who declined to be named due to the sensitivity of the issue.

“They are a constant presence. For one reason or the other there is always an inspection – I’d say they are here two months out of three.”

Letters to Veneto Banca and Banca Popolare di Vicenza, which must raise a combined 2.75 billion euros in cash and list on the market to meet ECB demands, threaten all the measures allowed by the EU banking resolution directive — including the last resort of the ECB removing top executives and taking over management.

A crucial test of the strategy is a much-anticipated merger between Banca Popolare di Milano and Banco Popolare that would be Italy’s first tie-up since the ECB took on supervision.

RENZI WEIGHS IN

The boards of BPM and Banco Popolare are meeting this week and sources close to the matter say Banco Popolare is considering a cash call of up to 1 billion euros as part of measures sought by the ECB to clear the merger.

Any deal would still need the blessing of both banks’ shareholders, including powerful unions who fear a tie-up will lead to job cuts.

Bankers close to the talks say the ECB’s conditions for approving the combination have been so stringent that after months of negotiations, the two banks considered abandoning the deal, which would create Italy’s third biggest bank.

“If this merger falls through, the ECB will have to take responsibility for this,” said a frustrated adviser for one of the banks. “It’s like the doctor killing the patient.”

Danielle Nouy, the ECB’s bank supervisory chief, said on Tuesday the merged bank had to be strong from the start.

“We are working very hard with our Italian colleagues to make sure that we put the adequate requirements, no more than is needed but no less, either,” she told the European parliament.

The ECB is demanding a leaner structure and a business plan for the new group within a month: the original deal outline included a 19-member board, two headquarters, no cash call and Popolare di Milano keeping its autonomy and a separate board for six years.

Prime Minister Matteo Renzi — who last year rammed through a decree intended to encourage banking mergers — weighed in on Friday to put pressure on the lenders to reach an agreement.

A sell-off in Italian banking stocks – some have lost more than half their value so far this year – and a flight of deposits from banks seen as more vulnerable, means the government feels time is running out.

“2016 is the year when Italy must sort out its banking problems once and for all,” Renzi said.

ECB’S CREDIBILITY DRIVE

Analysts say the ECB, which is headed by former Bank of Italy chief Mario Draghi, wants to establish itself as a credible institution, ensuring Europe’s banking industry is on a sound footing and taking laggards to task.

“The regulator is being extra cautious and particularly severe and active when it comes to Italy but the situation warrants it,” said Andrea Resti, an adviser to the European Parliament on banking supervision.

After a three-year recession, Italy’s banks are saddled with 360 billion euros ($405 billion) of bad loans – one third of the European total and equivalent to one fifth of Italy’s output.

Banks are reluctant to sell soured debts quickly, fearing that would blow a hole in their accounts and force them to raise cash in rough markets.

One reason for the sector’s fragility is the fragmented financial industry with 650 banks, most of which are tiny lenders with patronage ties to local communities. “It’s not that banks in other countries don’t have problems, but in Italy it’s more widespread, because you have lots of small banks that do not have the shock absorption capacity you find in bigger banks,” said Nicolas Veron, a financial services expert at think-tank Bruegel in Brussels. “A third of the banks that failed the ECB tests were Italian, but since then not much has happened.”

BAD MEMORIES

The unresolved problems of Italy’s banking sector also serve as a reminder of the scars left by the euro zone debt crisis.

The banks’ large holdings of government bonds plummeted in value as the cost of servicing Italy’s debt, the world’s fourth largest, soared at the height of the crisis.

Rome said then it did not need a Spanish-style, EU-funded bailout for its banks, but only the ECB’s pledge to save the euro and its cheap long-term loans halted the vicious circle of sovereign risks sinking the country’s lenders.

Now the government’s hands are tied, because under tougher European rules that came into force this year any rescue of weaker banks would wipe out shareholders and impose losses on creditors and perhaps even large depositors.

Italians got a bitter foretaste of the new regime when the government salvaged four tiny banks in November and 12,000 retail bond holders lost their savings.

Bankers under the microscope say ECB supervisors have uneasy relations with the Bank of Italy, which also declined to comment for this article.

“There is an atmosphere of mistrust and they think Italian banks have been let off the hook for too long by the national regulator,” said a senior investment banker involved in the merger negotiations between the two cooperative banks.

“The ECB is really giving us a hard time.”

(additional reporting by Paola Arosio in Milan, Stefano Bernabei in Rome and Francesco Canepa in Frankfurt; editing by Philippa Fletcher)

Frontex: 68K migrants arrive in Europe last month, 38 times last January’s rate

Cold weather and rough seas did not deter the approximately 68,000 migrants who arrived in Greece last month, the European Union’s border protection agency announced Monday.

That number was 38 times higher than the number of migrants who made it to Greece last January, Frontex said in a news release, at the start of what was a record year for displacement.

Frontex has said more than 1 million migrants arrived in the European Union last year, nearly five times the 2014 total. Monthly arrivals topped 100,000 in July and remained at six-figure levels through December as refugees fled conflict-torn nations in the Middle East and Africa.

The U.N. Refugee Agency (UNHCR) says another 35,000 migrants traveled to Greece and Italy by sea during the first three weeks of February, bringing this year’s total arrivals above 100,000.

Only 13,000 people arrived in Greece and Italy in the first two months of 2015, the UNHCR said.

Frontex tried to place a positive spin on the migrant numbers released Monday, saying they represented a roughly 40 percent monthly drop from the 108,000 who arrived in Greece last December. The agency said winter weather contributed to the month-over-month decline.

But those who did arrive still added to a growing list of migrants who are seeking better lives in Europe, as nations face growing pressure as to how to cope with the massive inflow of people.

The vast majority of them arrive in Greece, the International Office for Migration (IOM) has said, as they are often shuttled on packed, unsafe boats across the Aegean Sea from Turkey.

Most of the migrants who arrived in Greece are from Syria, Iraq and Afghanistan, Frontex said.

Others arrive in Italy, a destination for sea routes that depart from Tunisia, Libya and Egypt.

Most of the migrants who arrived in Italy last month were from Nigeria, Frontex said.

The African nation is home to Boko Haram, which last year’s Global Terrorism Index dubbed the world’s deadliest terror group, and Fulani militants who have become increasingly deadly.

However, the migrants who are choosing to make the journey are also encountering some risks.

On Friday, The IOM, UNHCR and United Nations Children’s Emergency Fund on Friday warned of the increasing number of migrants who have drowned on their journeys to Europe.

In Paris, military chiefs vow to intensify Islamic State fight

PARIS (Reuters) – Defense chiefs from the United States, France, Britain and four other countries pledged on Wednesday to intensify their fight against Islamic State, in an effort to capitalize on recent battlefield gains against the militants.

Islamic State lost control of the western Iraqi city of Ramadi last month, in a sorely needed victory for U.S.-backed Iraqi forces. But critics, including some in the U.S. Congress, say the U.S. strategy is still far too weak and lacks sufficient military support from Sunni Arab allies.

“We agreed that we all must do more,” U.S. Defense Secretary Ash Carter told a news conference after talks in Paris among the “core” military coalition members, which also included Germany, Italy, Australia and the Netherlands.

A joint statement by the Western ministers re-committed their governments to work with the U.S.-led coalition “to accelerate and intensify the campaign.”

The Paris setting for the talks itself sent a message, coming just over two months after the city was struck by deadly shooting and bombing attacks claimed by Islamic State.

French Defense Minister Jean-Yves Le Drian sounded an upbeat tone about the campaign, saying Islamic State was in retreat.

“Because Daesh is retreating on the ground and … because we have been able to hit its resources, it’s now time to increase our collective effort by putting in place a coherent military strategy,” he said.

British Defense Secretary Michael Fallon said the goal was now to “tighten the noose around the head of the snake in Syria in Raqqa.”

Carter forecast that the coalition would need to ramp up the number of police and military trainers. He also emphasized preparations to eventually recapture the Iraqi city of Mosul from Islamic State and the expanding role of U.S. special operations forces in Iraq and Syria.

COALITION NOT “WINNING”

Still, U.S. Senator John McCain, the chairman of the Senate Armed Services Committee, and other critics of U.S. President Barack Obama’s approach to the war effort say Islamic State still poses a potent threat.

“ISIL has lost some territory on the margin, but has consolidated power in its core territories in both Iraq and Syria,” McCain said at a Wednesday hearing on U.S. war strategy, using another acronym for Islamic State.

“Meanwhile, ISIL continues to metastasize across the region in places like Afghanistan, Libya, Lebanon, Yemen, and Egypt. Its attacks are now global, as we saw in Paris.”

Carter has sought to lay out a strategy to confront Islamic State, both by wiping out its strongholds in Iraq and Syria and by addressing its spread beyond its self-declared caliphate.

But U.S. officials have declined to set a timeline for what could be a long-term campaign that also requires political reconciliation to ultimately succeed.

Carter announced a meeting next month of defense ministers from all 26 military members of the anti-Islamic State coalition, as well as Iraq, in what he described as the first face-to-face meeting of its kind.

“Every nation must come prepared to discuss further contributions to the fight,” he said. “And I will not hesitate to engage and challenge current and prospective members of the coalition as we go forward.”

(Additional reporting by Marine Pennetier, editing by Larry King)

Italian Cities Take Drastic Steps to Reduce High Air Pollution

A few Italian cities are taking some dramatic steps to reduce the amount of pollution in the air.

Milan is banning all private vehicles like cars and motorcycles from 10 a.m. to 4 p.m. from Monday through Wednesday, according to a posting on the city’s website.

Rome has also introduced some restrictions on motorcycle and moped use due to a high level of air pollution there. The city is also saying that homes and offices must keep their thermostats between 62 and 64 degrees Fahrenheit, another anti-pollution measure.

In San Vitaliano, located just outside Naples, the mayor banned bakeries and catering businesses, including pizzerias, from burning wood chips, pellets and charcoal to cook – a staple of Italian pizza making – unless business owners first install an appropriate air filter.

Rome and Milan, Italy’s two largest cities, both rank in the top 20 when it comes to Europe’s most polluted cities, according to the Soot Free for the Climate campaign. Both have previously restricted traffic to fight pollution, according to a BBC report, and are doing so again because there hasn’t been any recent rain to help sweep away the smog.

San Vitaliano, on the other hand, is a relatively small municipality of about 6,000 people, though officials there are no less concerned about air pollution’s impact on public health.

The World Health Organization (WHO) estimates 7 million people died as a result of air pollution in 2012, the most recent year for which data is available. That represented about 1 in 8 global deaths.

The WHO has said polluted air is the world’s largest environmental health risk as it can fuel other issues like heart and lung diseases. The organization is especially concerned about fine particulate matter, which can adversely affect one’s health even at relatively small levels.

In issuing his edict, San Vitaliano mayor Antonio Falcone noted the city “has recorded high values ​​of pollutants,” particularly the fine particulate matter, and no one has been able to determine the source of the problem, which has worsened as temperatures became colder.

Meanwhile, the BBC reported Thursday that 10 cities in northeast China have asked residents to stay inside because of dangerous air pollution.

Italian Police Seize $2 Billion From Mafia

Italian police announced a huge step forward in their fight against organized crime in their nation.

A police sting against the ‘Ndrangheta mafia, the crime syndicate which controls much of the cocaine trade across Europe, seized assets worth over 2 billion euros or over $2.2 billion American dollars.

“[This is] a serious blow to the ‘Ndrangheta,” Italy’s interior minister Angelino Alfrano told the BBC.

Police seized at least 1,500 betting parlors, 82 gambling websites, 45 Italian companies and 11 foreign companies under the mafia’s control.  Six of those companies were in Malta according to investigators.

“[The suspects] recycled an enormous amount of ‘dirty’ money through the use of gaming accounts assigned to willing or unwitting people,” a police statement read.  “They bypassed the laws governing this sector, accumulating significant profits that were then reinvested in the acquisition of new companies and licences to further expand their activities.”

It’s the second major seizure by police in the last two weeks.  Two weeks prior, they seized more than 1.6 billion euros in assets from five men suspected of links to the mafia.

Italian Authorities Arrest Terrorists Who Plotted Vatican Attack

A massive anti-terrorism operation in Italy has arrested several terrorists including one cell that had plans for an attack on the Vatican.

Authorities say that some of the cell members had contact with Osama bin Laden before his 2011 death and that they had recordings of the exchanges from wiretaps.

Prosecutor Mauro Mura said that intelligence showed the group had planned attacks in Pakistan and Afghanistan along with domestic attacks.  The plot against the Vatican first came up among the terrorists in 2010 discussions.

Police say some of the suspects arrested Friday had been under surveillance for a decade.

The group was also smuggling currency to other terror networks.  One of the suspects arrested today was captured on a flight from Italy to Pakistan with 55,000 euros.

Investigators say the group tried to grow by smuggling migrants into Italy.  They would attempt to recruit the migrants to be a part of the al-Qaeda network.

The raids, which police called a “first-of-its-kind operation”also took out the terrorist’s headquarters on the island of Sardinia.

Shroud of Turin On Display For First Time in Five Years

Over a million people are expected to head to Turin, Italy for a glimpse of one of the most rarely viewed historical items.

The Shroud of Turin is believed to be imprinted with the face of Christ.  The shroud has only been displayed to the public five times since 1933. The shroud is usually kept inside a sealed container in a chapel next to the Cathedral of Saint John the Baptist.

The BBC said that one of the visitors will be Pope Francis.  The Vatican has never acknowledged the shroud as authentic although they admit the item is “important.”

Gary Habermas of Liberty University says that one of the recent discoveries on the Shroud is that the teeth of the person wrapped in it are visible.

“His skin is intact, his beard is intact, but you are able to see what’s inside coming out, just like if you are able to see what’s on the back of a hand,” he said.

“This is one of the best indications that the man in the Shroud, who was dead and was crucified, (has) radiation coming out,” he said of the teeth discovery. “And if that’s what this is, you’ve got something from the inside (coming out).

“(The teeth) are on the inside, but on the photo they are showing outside. Whichever way (the radiation) is coming, it dragged the image from the inside to the outside.”

The Archbishop of Turin says that regardless of what people believe about the Shroud, the relic is important.

“[It shows] in a clear and precise manner how the Gospels describe the passion and death of Jesus,” Archibishop Cesare Nosiglia said.

Muslims Throw Christians Overboard To Drown

Italian officials have 15 Muslims under arrested after it was discovered they singled out Christians to throw overboard during a crossing from Africa to Italy.

Authorities in Palermo, Sicily, are charging the Muslims with suspicion of murder.

The Christians were part of a boatload of migrants who left Libya Tuesday in a rubber boat.  Police say the Muslims, who are from Ivory Coast, Mali and Senegal, began to throw the Christians overboard as they were in the middle of the crossing.

The dead are from Nigeria and Ghana.

The remaining passengers reportedly formed a human chain to stop the Muslims from being able to kill anyone else on the boat.

Thousands each year attempt to make the voyage from Africa to the European coast and die in the process.  Rarely do people die from deliberate means as the Christians who were killed in this incident.

ISIS Vows To “Blow Up White House”

ISIS has released a statement that they plan to “Blow up the White House, Big Ben and the Eiffel Tower.”

ISIS spokesman Abu Muhammad al-Adnani outlined the group’s plot to take over Portugal, Spain, Paris and Rome in a 30 minute broadcast.  The message, aimed at the West, is called “So They Kill And Are Killed”.  The title is a reference to a verse in the Koran.

“We won the day Europe and U.S. dreamt of reclaiming Tal Hamis, Mosul, Sinjar, Tikrit, Qaim, Derna, Tell Abyad, and more,” stated the ISIS mouthpiece, as transcribed by Ynet News.

“We — with Allah’s help — want Paris, before Rome and Islamic Iberia and after we blow up the White House, Big Ben, and the Eiffel Tower before Paris, and Rome,” al-Adnani warned. “The Muslims will return to power, to be the vanguard and lead in every place.”

Intelligence experts say the message is really an attempt to boost the morale among the members of ISIS after a series of big losses to Iraqi troops and U.S. airstrikes.

Pope Francis Believes Reign Will Be Short

Pope Francis said in an interview published Friday that he doesn’t believe he will serve as Pope until his death.

The Pope spoke with Mexican broadcaster Televisa on the second anniversary of his election as Pontiff.  Francis told the broadcaster that he didn’t mind being Pope but that it would be nice to be able to go out in Rome and get a pizza without being recognized.

“I have the feeling that my pontificate will be brief – four or five years, even two or three. Two have already passed. It’s a somewhat strange sensation,” he said, according to a Vatican translation from Spanish.

“I feel that the Lord has placed me here for a short time.”

The Pope said that he likes what Pope Emeritus Benedict did in stepping down from the position.

“In general, I think what Benedict so courageously did was to open the door to the popes emeritus. Benedict should not be considered an exception, but an institution,” Francis said.