Italy plans to widen special powers over strategic sectors
By Giuseppe Fonte and Giulio Piovaccari
MILAN (Reuters) - Italy plans to extend the special powers it has to shield key industries from unwanted foreign interest, a senior government official said on Saturday, adding that the measures would apply to investors from other European Union nations.
The plan reflects concerns in Italy's ruling coalition that foreign investors could take advantage of the recent collapse of share prices triggered by the coronavirus crisis to buy assets in industries deemed as strategic for the country.
Cabinet undersecretary Riccardo Fraccaro said on Saturday that Rome would expand its vetting powers to the whole banking and insurance sector, as well as the health and food industry. A draft will be soon proposed to Italy's cabinet, he added.
"The legislation will also apply to transactions within the European Union," said Fraccaro, a prominent member of the ruling 5-Star Movement.
The new scheme would allow the government to oppose any move by non-EU and EU players to buy a stake in companies considered to be strategically important.
Since Feb. 23, when Italy imposed the first set of measures to contain the coronavirus outbreak, Milan's all-share stock index has fallen by almost 35%.
"It's clear that at this time it's necessary to include under state protection those industries that are fundamental for the country's development, and widen its scope at a European level," Fraccaro said. "Our priority is safeguarding national interest form any speculative aim."
Existing legislation on the so-called 'golden powers' gives the government the right to veto stake-building by non-EU players in strategic companies operating in the defence, energy and telecoms industries, as well as key financial infrastructure including the Milan Bourse and payment systems.
Fraccaro said that, according to its draft proposal, the government would be allowed to intervene by its own initiative, without waiting for any formal notification from the companies involved.
He added that it was also necessary to set lower disclosure thresholds for listed companies at which investors were requested to notify their purchases to the stock market watchdog, Consob.
Influential parliamentary security committee (COPASIR) last month urged the government to prepare a contingency plan to ward off hostile takeovers of top lenders and insurers.
Committee members pointed to the risk that takeovers could distance the country's lenders from their home turf, with implications for the refinancing of Rome's 2.4 trillion euro ($2.6 trillion) debt.
(Editing by Helen Popper)
