Further to my previous post…

January 16, 2008 · Filed Under Life in Italy · 4 Comments 

…my, Italian, other half has clarified the magistrates versus politicians thing, I am, almost, pleased to say.

Apparently, the non-political magistrates are, in reality, political. This means that there are those who like Mr B who go after Mr Prodi’s cronies, and then there are those who think Prodi’s the bees knees and thus ‘investigate’ Berlusco’s boys.

There, now. Everything is crystal clear.

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Prodi’s pretty picture

December 29, 2007 · Filed Under Life in Italy · 12 Comments 

In what could possibly be considered as one Italian equivalent to the UK Queen’s Christmas Day speech, Romano Prodi, Italy’s current hanging on by a thread prime minister, appeared to demonstrate that he is possibly a wee bit out of touch with life here in the Living Museum. He painted a rosy picture of an Italy in which things were getting better, although I’m not too sure Beppe Grillo and his supporters would necessarily agree with Mr P.

One can draw several possible conclusions from Prodi’s optimism: First, he had had a little too much Grappa, and was feeling merry. Next, he really felt he ought to say something positive in order to counter a certain Italian comedian’s attempts to discredit just about all Italian politicians. Then, he was simply reading a speech prepared by someone else. And finally, he is so out of touch with Italian reality that he honesty believes that things are getting better.

Of course, on Mr P’s salary and perks, one doubts whether financial problems and worries about obtaining a full time work contract really bug his household. And any attempts to investigate the irregularities in which several members of his government are involved can easily be swept under the carpet by allowing the transfer of those nasty law upholding Italian magistrates and financial policemen to posts where they cannot stick their annoying little noses into affairs which simply do not concern them.

In light of the above, I guess from Mr Prodi’s personal point of view, he has good reason to believe things are becoming better in Italy. At least they are for he and his chums.

Still, Mr P may be right, after all, lots more people have been flooding the ski slopes than in recent years. This must be a sign of an economic up turn, if ever there was one.

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Sub-prime crisis Italian style?

October 7, 2007 · Filed Under World News · 2 Comments 

By now, most of the world has heard of the crisis in the sub-prime mortgage market in the United States. Many will also know about what appeared to be the near collapse of a major British lending institution, the Northern Rock.

But what about the possibility of a similar crisis occurring in other countries, Italy for example?

On the surface, it does not look as though a sub-prime crisis could happen in Italy. After all, it would seem that Italian lenders are more prudent than their State side counterparts. Further, Italians do not generally take out huge mortgages as many property purchases are funded from family resources, inheritances and the like.  All seems to be sound, and risk levels appear to be low. One hopes so, anyway. The other evening though, I learnt something from someone which made me wonder whether Italy was as invulnerable to a sub-prime crisis as I first thought.

The other day, I was chatting with a union rep while having a pint down at the 442 pub. Now this chap, who works for a major multinational in Italy incidentally, told me that he knows of a few cases in which people who earn little more than one thousand Euros a month, have been managing to take out mortgages with monthly repayments as high as seven hundred and fifty Euros a month. These individuals had been coming to him because they were finding it very difficult to meet the repayments. And he gave me the impression that the numbers of people who were finding themselves in difficulties was increasing.  My initial reaction was, ‘How could a lender hand out mortgages with such high repayments to people on such a low salaries?’ In answer, I was told that when going through the mortgage application process, these people intimate that they have access to enough funds to be able to cover their debt, despite the high repayments. And this mere intimation seems to have been enough to for them to have secured mortgages. This is when sub-prime crisis alarm bells began ringing in my head.

Now, even though a potentially worrying situation could exist in Italy, I have to admit that I really have no idea as to the extent of this reckless lending, and, to be honest, whether any reckless lending has indeed been taking place.  I am after all, basing my suppositions on a chat with one union representative.

However, perhaps this situation needs to be looked into, so my worries can be proven to be unjustified, as I hope they are.  And preferably someone should start investigating this before it is too late.

I hope that the situation in the US has already got lenders here checking and double checking the level of sub-prime type lending in Italy is still at manageable levels.  Time, as always, will tell.

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