Chapter 829 Transition

On November 12, Italian Prime Minister Silvio Berlusconi submitted his resignation to President Giorgio Napolitano and officially resigned from the post of Prime Minister.

Berlusconi has served as Prime Minister of Italy three times and is the longest-serving Prime Minister in Italy since World War II - but this time he did not survive his third term.

Because of Italy's increasingly serious debt crisis, on the 8th of this month, Berlusconi had "promised" with the public that he would resign after the parliament passed the economic reform plan required by the European Union.

On November 12, the Italian House of Representatives passed the austerity bill to stabilize the domestic fiscal situation with 380 votes in favor, 26 votes against, and 2 abstentions.

After that, later that day, Berlusconi "as promised" to submit his resignation at the Presidential Palace. According to Berlusconi's spokesman in an interview, Berlusconi intends to withdraw from politics after his term as a member of parliament expires.

Berlusconi is currently a member of the People of Liberal Party in the House of Representatives, and his term of office will last until 2013.

However, even if he withdraws from Italian politics, Berlusconi can continue to be a media tycoon. The family business Fininvest founded by Berlusconi includes Mediaset, the largest private broadcasting operator in Italy, and also owns the Serie A club AC Milan.

Affected by the European debt crisis, the market value of this broadcasting company has shrunk by half since May this year. However, last month, Mediaset received an investment of 200 million euros from the SEM Group, which improved the company's financial situation.

After accepting Berlusconi's resignation, Italian President Giorgio Napolitano is scheduled to convene various political parties on the 13th to agree on a new prime minister candidate and set up a transitional government as soon as possible.

It is generally believed that Mario Monti, a famous economist and former European Commissioner, is a popular candidate for prime minister.

One of the signals is that after Berlusconi announced his conditional resignation on the 8th, Napolitano appointed Monti as a lifelong senator the next day.

Monti, 68, was born in a wealthy family in Varese, Lombardy, northern Italy. His father is engaged in the banking industry.

He graduated from Bocconi University in Milan, a famous Italian business school, in 1965, and later entered Yale University in the United States.

Monti is regarded as an academic economist with great theoretical achievements and rich practical experience, and is called "Super Mario".

Monti served as the president of his alma mater, Bocconi University, from 1989 to 1994. He was later appointed by then Prime Minister Berlusconi to join the European Commission as a commissioner in charge of internal market affairs. In 1999, he served as a commissioner in charge of competition affairs until 2004.

During his tenure as a member of the European Commission, Monti showed his tough side many times.

In 2001, he vetoed General Electric's acquisition of Honeywell International for $47 billion, conveying different European voices to Washington.

In 2004, he ruled that Microsoft Corporation "abused its monopoly position in the European personal desktop market" and violated EU law, and was fined about 500 million euros (about 670 million US dollars) and required to share key technologies with competitors.

In any case, the biggest challenge facing the new Italian prime minister after taking office is how to get Italy out of the sovereign debt crisis as soon as possible.

Earlier this month, the intensifying European debt crisis finally overwhelmed the Greek Papandreou government, and then the crisis pointed to Italy.

For a time, the yield on Italy's 10-year government bonds once exceeded the dangerous level of 7%, the Milan stock market fell sharply, and the global financial market was hit hard.

People are worried that Italy will default on its debts, and they are even more worried that the scale of Italy's debts will be so large that it will be "unrescueable" and drag down the eurozone, thereby hurting the global economy.

Against this background, the Berlusconi government has been under pressure from all parties at home and abroad, and has encountered an unprecedented "crisis of confidence" - other leaders attending the G20 summit have complained about Italy's ineffective reforms, and the domestic opposition has continuously accused the Berlusconi government of having limited ability to overcome the crisis, and even past allies have parted ways with it.

Italy is the third largest economy in the eurozone after Germany and France. Once the economic situation falls into a "Greek-style crisis", it will inevitably affect the stability of the eurozone.

EU leaders believe that a "firewall" must be established to prevent Italy from getting into trouble and affecting other countries in the eurozone.

Therefore, whether the Italian transitional government can help the country resolve the crisis has attracted much attention.

Analysts believe that Berlusconi's resignation has paved the way for the establishment of a transitional government and can temporarily calm the market's confidence crisis, but Italy's long-accumulated problems are difficult to be solved in the short term.

The fiscal austerity measures finally passed by the Italian House of Representatives on the same day include increasing consumption surcharges, raising the age for receiving pensions, raising fuel prices, and selling state-owned assets.

These measures need to be implemented by a government with strong executive power.

For Italy, it is crucial to achieve fiscal austerity goals and implement and strengthen economic system reforms to stimulate economic growth.

On November 14, Italian President Napolitano officially appointed Mario Monti as prime minister to form a transitional government.

After accepting the appointment, Mario Monti said that a new government would be formed as soon as possible. Italy is facing a very difficult time and must repair its finances.

Just one week after Mario Monti took office, in order to ease the fiscal crisis, Italy will auction 3 billion euros of 5-year government bonds.

Analysts believe that Italy's 10-year government bond interest rate has reached a record high of nearly 7.5%. Once the interest rate in this auction remains high, Italy, whose total debt is five times that of Greece, will have a hard time repaying its debt.

The market generally expects the auction interest rate to be around 6%. Since international capital is extremely worried about Italy's debt solvency, it needs higher yield compensation.

Before this auction of 3 billion euros of 5-year government bonds, the new Italian Finance Minister said that in addition to continuing to sell government bonds, in accordance with the austerity bill agreed by the previous parliament, they will also consider selling some state-owned assets to enrich funds. .

The 17.5% stake in United Power Group, currently held by the Italian government, is said to be included in the sale.

"Italy has expressed its willingness to consider our proposal to acquire the government's shares in United Power Group from them and purchase these shares at our bid of 13.2 billion euros..."

United Energy Group currently holds 55% of the shares of United Power Group. If the acquisition of the Italian government's shares is completed, their shareholding in United Power Group will reach 72.5%, thereby completing absolute control of this company. .

As for the acquisition funds...

This time, French bank Natixis and BNP Paribas will provide a total of more than 12 billion euros in loans for the acquisition of United Energy Group. Of course, a part of United Power Group's shares will be used as collateral.

With the profitability of United Energy Group, I believe that the repayment of these loans can be completed within 5 years...