National Interest Project Foreign Press, Italy’s success stories Second summary report Analysis for the period February - June 2008 © This document is for the exclusive use of Aspen Institute Italia National Interest Project Foreign Press, Italy’s success stories A favorable review by the international mass media contributes to increased foreign investment for a country and makes it easier for its citizens to forge business, financial and intellectual ties. It is for these reasons that Aspen Institute Italia, as part of its National Interest Project, has undertaken to monitor perceptions of Italy and Italians in the foreign print media with a view to highlighting their strengths. Work carried out by “Foreign Press, Italian success stories” On a daily basis since April 1, 2007, the Aspen Institute Italia’s “Foreign Press, Italian success stories” section has monitored US, British, German, French, Spanish, Middle-Eastern, South African and Brazilian newspapers and English-language papers published in Russia, China, Japan and India (a list of the publications reviewed can be found at the end of this summary report). Over the course of fourteen months, over 4500 articles have been considered, proof of Italy’s ample exposure in the foreign press. The items examined were then divided into three topic areas: - “Italian Business”, which refers to views on Italian companies and Italy’s economic policies; - “Italian Culture/Italian Life”, which relates to cultural, natural heritage and hence tourism aspects of the country; and - “People from Italy”, a section dedicated to stories featuring our fellow Italian citizens. From the outset it was decided not to take into account views in the foreign press that are strictly political in nature. 963 articles have so far been added to the publicly accessible section of the Aspen Institute Italia website (in both Italian and English), selected on the basis of their relevance to the abovementioned topic areas and with further articles being added each week. The Institute has also decided to offer its members a three to four monthly analysis of the issues reported by the foreign press, with this current report constituting the first update (the first such summary report was issued at the beginning of March 2008). ----------------------------------------------------------------------------- 2 For personal use only. This document is to be used exclusively for Aspen Institute Italia institutional purposes. Comments in the foreign press The key role played by Italian public companies “If they were to be judged on merit alone, the recent performances by the heads of Italy’s top trio of state-controlled industrial champions should have already comfortably secured their jobs and the renewal of their three-year mandates …ENI[, for instance,] has strengthened the oil group’s position through a series of deals in Venezuela (The Wall Street Journal of March 1, 2008), Libya (the International Herald Tribune of April 10, 2008), Algeria and Angola, not to mention delicate negotiations in Kazakhstan and a significant alliance with Russia’s Gazprom (The Wall Street Journal of June 25, 2008) … ENEL has … turned [from a] national electricity utility into an international heavyweight through … transformational deals in Spain[, France] and Russia (La Tribune of March 14, 2008 and The Wall Street Journal of May 15, 2008) … [and] Finmeccanica has transformed [itself] into a focused aerospace and defence group (The Washington Post of May 12, 2008)”. These expressions of admiration, published in the Financial Times of last March 13, highlight more than any other form of recognition could have done that some of the key players in the global economy over the last four months have been large Italian publicly-owned companies. ENI has managed to regain a foothold in Caracas (after Hugo Chavez’s decisive nationalization of the oil industry) and to take over the Belgian Distrigaz (Les Echos of May 27, 2008), ENEL made significant returns on its sale of the Spanish Endesa’s assets (ABC of March 29, 2008) and Finmeccanica is on the verge of pulling off the coup of the season, namely, the acquisition of the American DRS - one of the most important US defense suppliers. And it doesn’t end there. The foreign press also picked up on commitments to overhaul two state-controlled structures that were once synonymous with delays and inefficiency: the Italian State Railways and the Italian Postal Service. The news regarding the former organization was welcomed by the main French business daily, Les Echos, which on April 25, 2008 hailed “the significant improvement in the accounts of Italy’s State Railways in 2007” and noted that “the company has managed to contain its deficit to 409 million euro (almost a fifth of the losses it registered only a year ago) and its turnover has increased by 14.7%”. Praise for Italy’s Postal Service, on the other hand, came from across the English Channel, with The Times of February 29, 2008 observing that: “[Royal Mail’s] counterpart in Italy is … adopting a strategy that Royal Mail bosses might wish to consider. [It] not only delivers mail but is also a bank offering financial services … insurance [and] even mobile phones … The key … is diversification”. ----------------------------------------------------------------------------- 3 For personal use only. This document is to be used exclusively for Aspen Institute Italia institutional purposes. Italian industry: it’s not just about SMEs In highlighting the significant achievements of northeastern of Italy, Le Figaro declared on April 16, 2008 that “the secret ingredients of successful Italy” are by now well known: “work, innovation, flexibility and adaptation to user demand”. According to the foreign press, these elements have made the Veneto, Trentino-Alto Adige and Friuli-Venezia Giulia one of the most prosperous macro-regions in the European Union, representing a fundamental resource in an economic system made up of “an archipelago of small and medium-sized enterprises” (the Financial Times May 12, 2008), with sectors that have become world leaders (such as the packaging industry, as noted in the same paper on May 8, 2008). Nevertheless, the traditional and longstanding description of Italy as home to a myriad of SMEs, while undoubtedly true, does not give a comprehensive picture of the nation’s industrial scenario. Italy’s bulwark: the banking and insurance sector A similar approach threatens to obscure the robustness shown by Italian banks, which are less exposed to the international crisis than their foreign competitors (the Financial Times of May 15, 2008) and are now poised to make new acquisitions, particularly in Eastern Europe (the Financial Times of February 27, 2008). Just as in 2007, when the press focused on Unicredit and Intesa- Sanpaolo movements, over the last four months two other financial institutions seem to have attracted the attention of foreign newspapers, namely, the recently recapitalized Monte dei Paschi di Siena (Les Echos of March 6 and the Financial Times of May 21, 2008), and the newly-established Che Banca!, a retail credit division of Mediobanca. The news from Mediobanca’s headquarters in Milan resonated particularly in France, where the institution has a higher profile. And while La Tribune had already run the story by March 10, 2008, it was its rival Les Echos that on May 14, 2008 that got to the heart of the matter: “Like some fashion house creating a line of clothing for young people”, wrote its correspondent, “the venerable and mighty Milanese investment bank has decided to adopt a youthful image by creating an online retail credit division”. Over the last four months, the Italian finance sector also made headlines in the foreign press for two news items related to the insurance industry. The first item concerned Assicurazioni Generali, Italy’s insurance giant, which has refuted criticisms of its management by certain UK investment funds by issuing financial statements for 2007 posting net profits of over 2.9 billion euro (Handelsblatt of March 18, 2008) and demonstrating efficient management even in its foreign divisions (La Tribune of April 9, 2008). The second news story related to Fondiaria-Sai which, after ----------------------------------------------------------------------------- 4 For personal use only. This document is to be used exclusively for Aspen Institute Italia institutional purposes. taking control of the most important Serbian insurance company, announced that it was ready to invest over a billion euro in similar operations in Romania, Greece and Turkey (La Tribune of April 1, 2008). Companies in the manufacturing and retail sectors Italian industry has not gone unnoticed either. The foreign press, taken up as it has been over the last year in charting the resurgence of certain traditional Italian brands, welcomed the announcements by Fiat of its intention to open a manufacturing plant in North America (El Mundo of May 29, 2008) and to create an economical line of vehicles with either its Indian partner Tata (La Tribune of February 29, 2008) or its recent acquisition Zastava (Les Echos of May 2, 2008). The press has made much of the news that the ratings agency Standard & Poor’s have upgraded the Turin-based company from a BB+ to a BBB- rating in acknowledgement of its renewed stability. Other Italian companies received less detailed media coverage but nevertheless found ways of drawing attention to themselves. One such example is the catering and retail group Autogrill, which has set its sights