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Divides A Nation, Paralyses Rome – Will It Be A Bailout Or A Bust?


04/29/2017


Divides A Nation, Paralyses Rome – Will It Be A Bailout Or A Bust?
A growing number of Italians believe that it would be better for the country if their flag carrier Alitalia crashed as they are watching it go into yet another financial tailspin.
 
Many Italians are taking to social media to urge the government to resist the political temptation to rush to its rescue again, outraged at repeated state bailouts that have cost taxpayers more than 7 billion euros ($7.62 billion) over a decade.
 
"In electoral terms, Alitalia is worth nothing. It's a dead weight," Angelino Ghinelli tweeted into a social media storm that has not gone unnoticed in Rome, where ministers have so far shown a strong reluctance to make any guarantees.
 
"Enough with saving Alitalia," wrote Cinzia Briguglio, one of around 1,000 signatories to an online petition that sprang up this week, calling for the government not to get involved.
 
Including one, Codacons, which has threatened to ask Italy's Corte dei Conti, a judicial auditor, to examine any state bailout, consumer groups have also chimed in. For wasting public funds, the court can fine officials, including ministers.
 
77 percent of Italians believed the airline should be left to fail, shows an opinion poll published on Friday, four days after Alitalia workers voted to reject a union-backed rescue plan proposed by management.
 
"It's clear Italians are opposed to governments systematically running up deficits to deal with companies in crisis," Natascia Turato, director of Index Research, said in a comment the firm posted online, along with its poll results.
 
Alitalia appears headed for collapse without state support. After workers, last Monday, voted down a rescue plan that would have cut 1,700 jobs and trimmed salaries, creditors refuse to lend more money and rival airlines show little interest in buying it.
 
To see it through a bankruptcy process, under which an administrator will decide if it can be sold as a going concern or should be liquidated, Rome has thrown Alitalia a short-term lifeline, a bridging loan of up to 400 million euros.
 
While once a symbol of Italy's post-war economic boom but now struggling to compete at home against low-cost carriers Ryanair and EasyJet, the government, however, has ruled out renationalising the former state-owned business.
 
Saying the government is unwilling, directly or indirectly, to invest any capital in it, Italian Finance Minister Pier Carlo Padoan has gone a step further.
 
Few Italians believe the ruling Democratic Party will really stand by and watch Alitalia crash and its 12,500 workers lose their jobs with a general election due by May 2018.
 
Assuming he emerges from this weekend's Democratic Party primaries as its newly re-elected leader, he will come up with a plan to rescue the airline by mid-May, said former prime minister Matteo Renzi, who is charting his way back to power.
 
And neither Renzi nor his party's main political rival, the 5 Star Movement, has advanced any concrete proposals for Alitalia as the hardening of public opinion against Alitalia, though, makes the political calculations difficult.
 
On the question of whether they would be willing to see public money put into the company, Five Star's leaders have refused to be drawn into it.
 
"This time around the public is very divided on the issue which makes things difficult," said Andrea Giuricin, transport expert at Milan's Bicocca university and author of  "The endless privatization of Alitalia".
 
"This is why political parties like Five Star or politicians like Renzi don't yet have a clear position on the issue, are not yet certain what stand to take." 
 
(Source:www.reuetrs.com)