In the first week after Thanksgiving, two borrowers raised perpetual debt and several others obtained longer-dated… https://t.co/8qdQ087pwO
Italy steelworks nationalization
Steel manufacturer ArcelorMittal submitted a notice on 4 November to withdraw from the lease and conditional purchase of Ilva S.p.A., which owns the Taranto steelworks in southern Italy. ArcelorMittal took over the loss-making steelworks company in November 2018.
The decision came in response to a vote in parliament in October that removed ArcelorMittal's legal immunity from criminal liability over potential environmental breaches. The legal protection was meant to last for the duration of the clean-up phase at the heavily polluting steel plant in Taranto. The removal of the legal protection was advanced by the ruling Five Star Movement (Movimento Cinque Stelle: M5S), which is rewarding its environmentalist base. Ilva employs around 10,700 people in Italy, more than 8,000 of whom work in Taranto.
The political ramifications of the winding down of the Taranto steelworks, Europe's largest in terms of output, and the resulting job losses in one of Italy's poorest regions indicate that it is very likely that the government will restore ArcelorMittal's legal protection. However, the steel corporation is likely to insist on additional concessions, such as an agreement to lay off 5,000 workers to restore profitability.
If the government extends the deadline for ArcelorMittal to make one of its three operational furnaces at Taranto compliant with safety regulations, this would increase the likelihood of ArcelorMittal reconsidering its decision. A court decision in July annulled a previous ruling to render the furnace idle following a fatality in 2015 and gave ArcelorMittal 90 days to implement the overhaul, which according to the corporation was not enough time.
The government's bargaining position would weaken further if the US government were to decide on 13 November to impose a 25% tariff on EU car imports, thus dampening the industry's demand for Italian steel. If the government were to fail to reach a settlement with ArcelorMittal, it would be likely to nationalise Ilva. Nationalization would be driven by the need to safeguard Italy's steel industry and protect jobs and would not be an indicator of similar measures in other sectors.
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