The Haizum Italian Insider Report is a monthly news service that monitors the most relevant issues in Italy. This document focuses on political, Economical, and Strategic matters, taking into account 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: 20 Minutes
Recent developments in Italy encompass a diverse spectrum of political, economic, and strategic facets, mirroring the nation’s dynamic landscape in governance and global interactions. Italian President Sergio Mattarella has prominently advocated for an enhanced international role for the European Union, emphasizing the imperative of unity and a robust global presence.
Under the leadership of Giorgia Meloni, Italy has witnessed significant modifications within key ministerial structures. These noteworthy expansions and transformations have elicited pertinent inquiries regarding their harmonization with the overarching strategies of the Ministries. Furthermore, the approval of representatives for the National Council for Economics and Labor (CNEL) has facilitated its operational capacity. Italy’s legislative landscape has not remained immune to scrutiny, with the Senate of the Republic’s Impact Assessment Office advocating for a comprehensive overhaul of the Golden Power regulation.
On the international front, discussions between Italian Prime Minister Giorgia Meloni and Greek Prime Minister Kyriakos Mitsotakis have spanned a wide array of topics, including European migration policies and collaborative efforts in the energy sector. Furthermore, Italy has made concerted efforts to bolster its strategic partnership with Kazakhstan, particularly within the energy sector. Foreign Minister Tajani’s visit to Kazakhstan signifies Italy’s dedication to promoting trade and advancing cultural diplomacy. In the realm of global diplomacy, Rome is actively and meticulously pursuing its bid to host Expo 2030. This endeavor entails a multifaceted approach involving diplomatic initiatives spanning regions such as North Macedonia, the United States, and Brazil, as Italy contends with Saudi Arabia.
Within the energy sector, Eni has undertaken strategic maneuvers, divesting its Nigerian subsidiary while significantly investing in Egypt. Nevertheless, challenges loom on the horizon, exemplified by a recent Court of Appeals decision related to Alitalia. This legal development has the potential to complicate Italy’s industrial engagements with Lufthansa regarding Ita.
Moreover, Leonardo is strategically repositioning its aerospace and defense portfolio towards high-tech sectors, with the contemplation of reducing its stake in Avio’s launcher segment. Lastly, an enduring dispute between Leonardo and Webuild concerning the Bayt Stadium in Qatar has entered arbitration, with the potential for substantial financial implications.
In a plea to the participants of the Ambrosetti Forum, Italian President Sergio Mattarella emphasized the need for the European Union to play a more significant international role. He stated that no European country, regardless of its size or income, should consider a future separate from the others, as it would be both unrealistic and counterproductive.
Mattarella acknowledged the European Union as the framework for shaping the future, despite the challenges it faces in the integration process. He urged Europe to strengthen its position as a global player, even in the context of the upcoming 2024 elections, focusing on peace, security, prosperity, and democratic values.
He also mentioned the Conference on the Future of Europe as an opportunity for necessary treaty reforms. Mattarella expressed hope for renewed energy in the next European Parliament and its mandate. In conclusion, he warned against missing opportunities in history, emphasizing the need for the EU to remain united and engaged in global affairs.
Unlike the two previous Governments, Giorgia Meloni’s administration has not established new Ministries, at least for now. However, the Government has intensified its efforts to modify the structure of key Ministries. The Meloni Government has made structural changes to six Ministries: economy, health, labor, culture, university, and tourism. In some cases, the changes were relatively modest, primarily involving an increase in senior offices. In others, the modification affected the very structure of the Ministry, including the establishment of departments or general directorates.
The Ministries of University and Tourism, both relatively recent institutions, saw notable expansions in their organizational structures. These expansions were driven by the need for more streamlined functions.
Notably, the Ministry of University and Research, until 2020, was managed as a department within the Ministry of Education and University. It had three general directorates. However, upon its establishment as a separate Ministry, the number of general directorates increased to six (including the Secretary-General). Subsequently, with the approval of Decree-Law 44/2023, the number of general directorates expanded to eight, although the new regulations are not yet in effect.
Similarly, the Ministry of Tourism, until 2021, fell under the Ministry of Culture, with a dedicated general directorate. This structure had only three non-general directorate offices. With the establishment of the new Ministry, four general directorates (including the Secretary-General) were introduced. By February 2023, with the approval of Decree-Law 13/2023, this number increased to five and then further to seven two months later with Decree-Law 44/2023.
The most significant changes occurred in the Ministry of Economy and Finance (MEF), which represents the most important Ministry in the state structure from various perspectives. The Ministry’s regulations, starting with the 2008 version, defined a structure consisting of four departments: Treasury Department, General State Accounting Department, Finance Department, and General Administration Department. This organizational model remained stable until recently. The Decree-Law 44/2023 increased the maximum number of MEF departments to 6. This regulation will add the Department of Economy and the Department of Tax Justice to the currently operational four departments.
In three other cases, the changes adopted in the past year did not lead to an increase in the number of top-level structures but rather shifted from an organizational model based on general directorates to one based on departments. This transition, unlike the general directorate model where each reports to the Secretary-General, assumes a division of competence areas into homogeneous regions, each overseen by a department head, who reports directly to the Minister.
The Ministry of Health initiated this process with the adoption of Decree-Law 173/2022, although the regulation has not been implemented yet. It is intended to organize the Ministry into four departments.
With the approval by the Council of Ministers, the nomination of the 48 representatives of the productive categories was finalized, bringing the new assembly of the CNEL to full operational status. This clears the way for the House of intermediary bodies to proceed with its functions, including the investigation on the minimum wage, as directed by Prime Minister Meloni.
The remaining administrative steps, expected to be completed in September, include the adoption of the President of the Republic’s decree, its registration with the Court of Auditors, and its subsequent publication in the Official Gazette. Once these procedures are completed, President Brunetta can schedule the inaugural meeting of the XI term.
Matteo Piantedosi, Italy’s Minister of the Interior, has recently undergone a transformation in his communication style. Piantedosi has adopted a more social media-oriented approach. This shift can be attributed to Giuseppe Inchingolo, a Puglia-based journalist and founder of Artsmedia, who has been appointed as the head of social and digital communication at the Ministry.
In addition to Artsmedia’s social and strategic consultancy, the makeover includes a foray into television. Paola Tommasi, the newly appointed head of the Minister’s political office and an economist with a Bocconi background, will handle this aspect and more.
This is the first time in the country’s democratic history that a member of the Taiwanese Government has visited Italy for institutional meetings. Wu met with four members of the Italian parliament – two from the League and two from Fratelli d’Italia. Milan is where Taipei’s Foreign Ministry announced the opening of a new Taiwan representative office. It is not just about diplomacy: in April, the Ministry of Made in Italy sent a delegation to Taiwan to talk about microchips.
They emphasized the need for a unified European migration policy to address the ongoing challenges effectively. They also focused on energy cooperation, including projects like the Alexandroupolis port and the Ionian submarine cable, aiming to enhance Greece’s international connectivity. Both leaders agreed to convene the Supreme Council for Cooperation between Greece and Italy in early 2024 to strengthen their bilateral relations further. Additionally, they discussed the exclusion of defense costs from European fiscal rules.
Beyond immediate concerns, the discussion hinted at the upcoming European elections and the composition of the new European Commission. While not officially addressed in Athens, the significance of Greece within the European People’s Party (EPP) due to its party leadership and personal connections was acknowledged.
The possibility of an alliance between the EPP and the European Conservatives and Reformists (ECR) has been under discussion for some time. This alignment was evident in Manfred Weber’s recent statement on the Mediterranean, suggesting a need to reconsider the EU’s approach to the Southern Mediterranean after his visit to Tunisia. These themes will be discussed at the ECR meeting in Reggio Calabria, titled “When the South Grows, Italy and Europe Grow,” with the participation of various Government and FdI representatives.
Italy and Kazakhstan are strengthening their strategic partnership in Central Asia, driven by geopolitical and economic factors, particularly in the energy sector. Italy aims to maintain an active role in the region under the European Union-Kazakhstan Enhanced Partnership and Cooperation Agreement. With Russia no longer the primary geopolitical reference in the region, and Kazakhstan playing a role in European energy supply diversification, Italy sees opportunities for bilateral cooperation.
Foreign Minister Antonio Tajani’s visit to Astana reaffirms the Government’s proactive foreign policy stance. Tajani praised Kazakhstan as a strategic partner, highlighting its internal reforms, diplomatic sensibility, and moderation on international issues like Ukraine and Afghanistan. He announced the upcoming inauguration of an Italian Cultural Institute in Almaty to promote cultural diplomacy. During the visit, Tajani and his Kazakh counterpart, Murat Nurleu, signed a letter of intent on renewables and rare earth minerals to facilitate direct investments and joint ventures.
The two nations have seen a significant increase in trade, with nearly 15 bln euros in exchange, mainly due to Kazakh oil exports. Pope Francis referred to Kazakhstan as a “bridge between East and West” during his visit, emphasizing its role in connecting cultures. Projects are underway between the two countries, including the assembly of agricultural tractors and combined harvesters under the “Made in Kazakhstan jointly with Italy” brand, launched by “Agromash Holding KZ” in collaboration with the Italian multinational “SDF Group.” There’s also a joint venture between the Italian company PetrolValves and the Kazakh group “Merlion Development Group.”
Rome’s pursuit of Expo 2030 remains active, with a focus on diplomacy and lobbying efforts. Recent developments involve Mayor Gualtieri’s visit to Skopje, North Macedonia, aiming to secure support for Rome’s bid. The crucial vote by the Bureau International des Expositions is scheduled for November 28, with Macedonia being one of the deciding countries out of 181. While Saudi Arabia appears confident, the outcome is uncertain, as Rome gains support from various nations.
In contrast, Paris is expected to vote for Riyadh, despite Italy’s efforts to sway the decision. Rome has received backing from the United States and Brazil. Mayor Gualtieri plans to continue his diplomatic efforts in Japan, Southeast Asia, and Africa, while businesses and industrial leaders, along with the Roma Expo 2030 committee, remain optimistic about Rome’s chances. The campaign also includes engagement with foreign leaders, such as the recent meeting between the Kenyan President and Italy’s Deputy Minister for Environment and Energy Security, discussing Italy’s Expo 2030 candidacy. President Rocca of Lazio is actively supporting Rome’s bid, receiving the Mexican Ambassador as part of these efforts.
The European House-Forum Ambrosetti, the organization behind the Cernobbio Forum, continues to see impressive financial growth. In 2022, their revenue exceeded 44 mln euros, up from 30.5 mln euros in 2020. Profits also increased to over 4.8 mln euros from 4.1 mln euros two years prior.
However, their 2022 financial report also reveals debts totaling 24.2 mln euros, up from almost 22.4 mln euros in 2021. Despite these debts, the company distributed dividends of over 3.1 mln euros in 2022, a significant increase from just over 2 mln euros in 2020. The majority of these dividends go to Ganesh srl, the controlling shareholder with over 70% ownership, held jointly by Marco Grazioli and Valerio De Molli, the group’s president and CEO. Chiara Ambrosetti, the daughter of Alfredo Ambrosetti, the group’s founder, and a key figure behind the Cernobbio Forum, holds approximately 11% of the shares.
The remaining shares are distributed among various individuals, including Daniela Bianco, Gianluca Consonni, Flavio Sciuccati, Lorenzo Tavazzi, Alessandro De Biasio, Nicoletta Marini, Luca Petoletti, and The European House-Ambrosetti itself.
Mario Sechi, the former spokesperson for Prime Minister Giorgia Meloni, has been appointed as the new editor-in-chief of Libero. Sechi has a long career in journalism, having worked for various media outlets, including L’Unione Sarda, Il Tempo, and Agi, and he has been deputy editor for Il Giornale, Libero, and Panorama. Daniele Capezzone, who left active politics six years ago, will serve as the editorial director. Libero is undergoing changes. It will also share a common workspace with Il Giornale in Milan. Alessandro Sallusti and Vittorio Feltri, the former leaders of Libero, will now join Il Giornale.
The new management board, chaired by Giampaolo Angelucci, with Paolo Berlusconi as honorary president and Nicola Speroni as CEO, has appointed Sallusti as the new editor-in-chief of Il Giornale, with Feltri as the editorial director. They have also appointed Osvaldo De Paolini as deputy editor and brought in prestigious national and international columnists like Mike Pompeo and Edward Luttwak. Augusto Minzolini, the outgoing editor-in-chief, will remain with Il Giornale as an editorialist, and the current deputy editors Nicola Porro, Francesco Del Vigo, and Marco Zucchetti will continue in their roles. The Berlusconi family remains a shareholder, reaffirming their commitment to the project.
The National Semiconductor Chip Center will be established in Pavia, officially announced by Minister Urso during his visit to Lombardy. This foundation aims to make Lombardy and Italy a strategic hub for the digital industry.
Possible additional locations in Bologna and Catania are being considered. The Italian Semiconductor Chip Design Center’s mission is to promote integrated circuit design, enhance professional training in microelectronics, and establish a network of universities, research centers, and businesses to foster innovation and technology transfer. Funding for its establishment and operation is allocated in the state budget, with €10 mln for 2023 and €25 mln annually from 2024 to 2030.
In addition to the existing Microelectronics Fund, the Meloni Government allocated approximately €700 mln for tax credits in research and development, aligning Italy with the broader European strategy outlined in the Chips Act to reduce dependence on China and Asia in semiconductor manufacturing and market share.
The foundation may also have two branches: one in Bologna, where the Cineca and the powerful Leonardo supercomputer are located, and another in Catania, home to STMicroelectronics and its significant role in silicon carbide research since the 1990s, contributing to semiconductor geopolitics.
Eni is selling its Nigerian subsidiary and planning to invest $7.7 bln in Egypt over the next four years. Eni aims to strengthen its successful projects in Egypt, as announced by CEO Claudio Descalzi during a meeting in Cairo with Egyptian President Abdel Fattah al-Sisi and Minister of Petroleum Tarek El-Molla.
Eni has also signed an agreement with Oando Plc to sell Nigerian Agip Oil Company Ltd (Naoc Ltd), a wholly owned subsidiary engaged in onshore hydrocarbon exploration, production, and electricity generation in Nigeria. Eni will retain its stake in the Spdc JV (Shell Production Development Company Joint Venture). This move aligns with Eni’s 2023-2026 plan, balancing organic growth with portfolio activities that add value and divesting assets that offer greater opportunities to new owners.
The meeting in Egypt included discussions with high-ranking Eni officials and underlined the strong partnership between Italy and Egypt. President al-Sisi expressed his desire to enhance cooperation in energy exploration, development, and production to maximize Egypt’s energy resources. CEO Descalzi highlighted the importance of Egypt as a key global market for Eni.
Carlos Alberto Mendes Pereira is no longer the media head at Enel Group. His name is not included in the reorganization plan for the division, signed by the new Head of Institutional Affairs, Sustainability, and Communications, Nicolò Mardegan, who joined in July from Ita Airways. Mendes Pereira will likely remain within the company, possibly in a different role. There is currently no immediate plan to appoint a replacement, but the preference is for an internal selection. Recently, after a long tenure at Cassa Depositi e Prestiti, which ended with Dario Scannapieco’s arrival at the company, Fabio Marando also joined the group as the media head for Italy.
The recent Court of Appeals decision regarding former Alitalia employees could potentially complicate an industrial operation that Italy cannot afford to forgo. Although it may seem at first glance that the employees have won, a closer examination reveals that there might be more at stake concerning the long-awaited industrial operation that dates back to the failed merger talks in 2010 with Air France.
The Court of Appeals in Rome rejected Ita’s appeal, which aimed to suspend the execution of the June verdict that ordered the reinstatement of 77 former Alitalia employees. Ita’s request to involve Lufthansa in the legal dispute was also rejected. The judges’ decision could potentially undermine the German company’s operation with ITA, which would allow them to remain in the market while not being fully controlled by the Italian Government. By the end of the year, Italy must sell 41% of Ita for €325 mln. This ruling may stiffen the stance of the buyer.
Under CEO Roberto Cingolani’s guidance, Leonardo is shifting its aerospace and defense portfolio. The company is looking to increase its presence in high-tech sectors, particularly satellite manufacturing with Thales Alenia Space Italia and services through Telespazio, while potentially reducing its stake in Avio’s launcher segment. This represents a change from Leonardo’s previous move to increase its Avio stake in 2020.
Analysts believe that Leonardo’s space business, while promising, remains a relatively small part of the company, and any changes are unlikely to disrupt its financial targets. Speculation about a hostile takeover of Avio is seen as improbable due to regulatory constraints.
Leonardo’s future plans include creating a dedicated space division, led by Franco Ongaro, to complement its existing divisions (helicopters, aircraft, aerostructures, electronics, and cybersecurity).
The possibility of a swift NetCo deal is growing. However, several conditions, including Vivendi’s approval (holding a 23.75% stake), still need to be met. The Italian Government’s support for the €21 bln NetCo offer by American fund KKR, expected by September 30th, increases the likelihood of a successful deal. Barclays now estimates a 75% chance of a deal, with potential post-deal ServCo valuations ranging from €7 bln to €14 bln.
Barclays notes that Tim’s Q2 2023 financial results exceeded expectations in Italy and Brazil. Still, the competition in Italy remains intense, especially with Iliad expanding its FTTH coverage.
Tim’s management suggests the KKR deal could take 9-12 months, during which Open Fiber and Tim’s FTTH implementation will progress. Approval from the European Commission may add complexity.
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