March 22, 2020 / 5:08 PM / 9 days ago

Italy to bolster special powers in strategic assets - officials

ROME, March 22 (Reuters) - Italy is close to approving measures to bolster the special powers it has over key industries to ward off unwanted foreign interest, officials said on Sunday.

The move reflects concerns in the ruling coalition government that investors’ appetites for strategic assets could be whetted by collapsing share prices due to market turbulence triggered by the coronavirus epidemic.

Since Feb. 23, when Rome imposed the first set of measures to contain the coronavirus outbreak, Milan’s all-share stock index has fallen more than 35%.

On Saturday, Italy recorded a jump in deaths from COVID-19 of almost 800, taking the overall toll in the world’s hardest-hit country to almost 5,000.

“We are ready to apply a protective shield to defend Italian strategic companies. We’ll use any means necessary,” said cabinet undersecretary Riccardo Fraccaro, a prominent 5-Star member.

Germany and Spain announced similar initiatives this week, while France said it could nationalise big companies if necessary.

The so-called golden powers give Rome the right to veto stake building in strategic companies operating in the defence, energy and telecoms industries, as well as key financial infrastructure including the Milan Bourse and payment systems.

The government has already drafted a decree aimed at strengthening its veto powers in these businesses, two sources close to the matter told Reuters, asking not to be named because of the sensitivity of the matter.

One source said the measures could be announced sometime in the next two weeks.

Rome also plans to beef up its special powers for the whole banking and insurance sector “in a broader decree expected to be approved early in April,” a government official added.

Influential parliamentary security committee (COPASIR) this week 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 ($2.57 trillion) debt.

The government owns controlling stakes in strategic companies including oil giant Eni, utility Enel , defence group Leonardo and power grid operator Terna.

Rome also considers as a strategic asset the Milan bourse because it controls the domestic government bond trading platform MTS.

$1 = 0.9351 euros Reporting by Giuseppe Fonte and Stephen Jewkes Editing by Giselda Vagnoni and Frances Kerry

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