CERNOBIO, Italy, Sept 4 (Reuters) – Italy can’t afford political momentum for weeks after elections this month, with business chiefs saying high energy prices are already forcing many companies to cut output.
Business owners gathered on the shores of Lake Como for the weekend’s annual Ambrosetti Forum to protest against politicians who ousted Prime Minister Mario Draghi amid Europe’s energy crisis.
Armando de Nigris, chairman of the eponymous balsamic vinegar maker, said: “It will be Christmas before the new government’s ministers are in office, but they are looking for a solution in days, not weeks.”
Sign up now for unlimited access to Reuters.com
Record gas prices have more than doubled the cost of storing grapes that produce about 35 million bottles of balsamic vinegar each year.
“We are at risk of producing something that we cannot sell in six months because we cannot pass on the price increase,” he said.
The centre-right is on course for a clear victory in the September 25 election, but government formation is a slow process in Italy.
Industry lobby Confindustria warned last week that Italy was facing an “economic earthquake” due to high energy prices and called for support for a supervisory administration led by former European Central Bank chief Draghi. Read more
Italy has allocated more than 50 billion euros this year to soften the impact of high energy costs for companies and households, and more aid is expected this week. Read more
Recovery funds at risk?
Ricardo Illi, chairman of food group Pollo del Gusto, which owns French tea brand Damon Freires and chocolate label Domori, fears Italy will lose some of the EU funds promised for its post-Covid recovery.
“Draghi could have continued until the end of his mission … whoever comes will cost us billions of euros,” he said. Italy is lined up for 200 billion euros, but the funds are still implementing a series of reforms.
Dependent on Russian gas and a large manufacturing sector built mainly by small businesses, Italy’s economy is particularly vulnerable to the energy crisis.
Since the conflict in Ukraine began in February, many companies in energy-intensive sectors such as steel, glass, ceramics and paper have been forced to curtail production due to high production costs. Read more
“When the next (economy) minister steps up to solve our problems – and we hope he will be the best of all ministers – it will be too late,” said Romano Pezzotti, who runs Fersovere metal recycling near the northern city of Bergamo.
“After making the big mistake of collapsing the government during the worst crisis of the last century…politicians need to reorient themselves to a body capable of solving the country’s problems,” he said.
The energy crisis casts a long shadow.
“We all know what needs to be done,” said Matteo Tiraboschi, chief executive of premium brakes maker Brembo ( BRBI.MI ), which is listed on the Milan stock market.
“The energy bill in Italy has doubled.”
Sign up now for unlimited access to Reuters.com
Reporting by Valentina Za and Elvira Pollina Editing by Keith Weir and Philippa Fletcher
Our Standards: The Thomson Reuters Trust Principles.
