The heir to the Diesel throne recently claimed young
entrepreneurs should look outside of Italy, but TMF Group's
Italian MD Massimo Paolo Gentili begs to
When Stefano Rosso, co-CEO of Italian powerhouse Diesel, told Bloomberg last week that young
entrepreneurs would be "crazy" to start a business in
Italy at the moment, it certainly took many by surprise. While
Italy has had its problems of late, its business outlook is
New Prime Minister Matteo Renzi staged a coup in his centre-left
Democratic Party in February, ousting party rival Enrico Letta from
the top job amid accusations that Letta was failing to push through
reforms needed to revive the economy.
Since then, international markets have been positive about
Italian business prospects. The news that Renzi was in charge saw
Italian 10-year yields fall by almost 30 basis points within a
week; Moody's upgraded the outlook for the country's
creditworthiness at the same time, accelerating the fall in
Buoyed by the shoots of recovery in the Eurozone, and by
Renzi's promises of reforms, Italy is emerging as one to watch.
The country is changing for the better.
The fact the government has finally given endorsement to
state-owned Finmeccanica's decision to sell its loss-making
unit Ansaldo Breda and its stake in rail signalling firm Ansaldo
STS – a decision that had been delayed by two years and saw
agencies cut the group's net debt to junk – is seen as a
positive sign for Renzi's intentions. In fact, Russian oil
company Rosneft has just agreed to buy a 50% stake in Pirelli &
Cie SpA's holding company – should we view this as a sign
of confidence in the Italian markets?
But it's not all rosy. Earlier this week Italy's biggest
bank, UniCredit, reported a huge loss just hours after the European
Central Bank disclosed details of increased regulatory scrutiny for
European financial institutions. Indeed, the Eurozone as a whole is
still not out of danger. Caution must still be exercised.
While there are signs of recovery both in the Eurozone and in
Italy itself, prices of transactions are still relatively low.
Italy is in that unique position of standing on the edge of reform
and recovery, but offering investors the right moment to seize on
attractive prices. The Pirelli deal shows that Russia, at least,
has an eye for a good deal.
Things are changing in Italy, and there is a feeling of new
hope, but it's still a tricky situation. To make the most of
the opportunities on offer, you would be best advised to find a
local partner who knows the Italian market inside out and can work
with you from within the winds of change. With 25% of senior
decision-makers at global organisations looking to move further
into Europe in the next 12 months, the prospects in Italy are well
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