Italy’s industry chiefs have warned that the country faces a “full credit emergency” as thousands of companies run out of critical funding, threatening a slide into deeper depression.
Confindustria, the business federation, said that 29% of Italian firms cannot meet “operational expenses” and are starved of liquidity. It said that a “third phase of the credit crunch” is under way that matches the shocks in 2008-09 and again in 2011.
It said the economy was caught in a “vicious circle” where banks are too frightened to lend, driving more companies over the edge – with 1,000 going bankrupt every day.
Franco Bernabe, head of Telecom Italia, said firms are “dying from lack of liquidity” and called on the Bank of Italy to take bold action to head off a disaster. “The Italian economy is being suffocated. The country must intervene rapidly to reinject funds into the economy,” he said.
Full article: 1,000 companies going bankrupt in Italy every day as country faces full-scale ‘credit emergency (Financial Post)