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Wednesday July 11, 2007

Buying Italian

A new type of nepotism was created with the establishment of the EU and it has now become an issue if showing favoritism for national businesses is allowed, and not just “frowned upon”. It is not hard to see why a country would want to, besides the increases in revenue and domestic product, nationalism can also be increased not to mention the possibility of future growth drawn in from higher confidence levels (Hoping, ofcourse, that these are the intentions). Nonetheless, EU top courts have decided to sue Italy over issues with Italian practices of “buying Italian” that seem to overstep the boundaries set forth by the commission. This could lead to counterintuitive repercussions for the country forcing a change in practices that could be viewed as either necessary or evil – yet not a conjunction of both.

Italy has been foregoing standard competition rules set forth by the EU and allowing Finnemeccanica, an Italian company supplying the country with most of the helicopters for many internal institutions, to furnish the country without bidding at free market prices, says the top European courts (who are, at the same time, trying to ease contracts over military equipment). This is the largest sector to date put to question by the EU and its resolution could change a lot of things for many countries. But who’s intentions are the EU looking to protect? Smaller businesses or other countries, a mixture of both? This issue is not as black and white as it seems and the EU should appeal to the gray matter in between before upturning social norms while at the same time judging fair business practices.

 

Italian telecom companies are also in headlines for the trendsetting steps many, such as Wind, are taking in selling their radio towers. This move, which could raise up to 2 Billion in revenue, shows not only a way to reduce costs but also a step towards the shifting of focus more towards maintaining a network than investing in infrastructure (which will be intresting to follow in the months to come).

 

By Francesco Lugli