Thursday, March 14, 2013

bankster "austerity" throttling italian companies too

telegraph | Confindustria, the business federation, said 29pc of Italian firms cannot meet "operational expenses" and are starved of liquidity. A "third phase of the credit crunch" is underway that matches the shocks in 2008-2009 and again in 2011.

In a research report the group said the economy was caught in a "vicious circle" where banks are too frightened to lend, driving more companies over the edge. A thousand are going bankrupt every day.

Franco Bernabè, the head of Telecom Italia, echoed the warnings, lamenting that firms are literally "dying from lack of liquidity". He called on the Bank of Italy to take bolder action to head off disaster. "The Italian economy is being suffocated. The country must intervene rapidly to reinject funds into the economy", he said.

Fulvio Conti, head of the energy group Enel, exhorted Rome to give the economy an immediate shot in the arm by paying €48bn in state arrears to companies, arguing that this can be done without breaching EU deficit rules. This would amount to fiscal stimulus of 1.5pc of GDP.

Late payments have become a chronic problem across the board in Italy, with 47,000 official complaints last year. The research group CGIA di Mestre said half of small companies cannot pay their staff on time.

The pleas for action come as a new report by Standard & Poor's warns that default rates in Europe have reached the highest level since the global crisis in 2009, with most of the carnage concentrated in the Club Med bloc.

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