'New Bribesville' hits Italy Inc before election

Feb 15 2013, 21:39 IST
Comments 0
SummaryCorruption probes at three major companies have hurt corporate Italy's image with investors and revived memories, just a week before an election, of the scandals that devastated Italian politics in the 1990s.

good for the country. But I would not want to find out that the company is paying for mistakes it never made."

While Monte dei Paschi, based in Siena, has links to the PD, Finmeccanica chief Giuseppe Orsi was appointed with backing from the Northern League, an ally in the wealthy and populous region around Milan of former conservative premier Silvio Berlusconi.

The media tycoon, who stepped down amid scandal 15 months ago to make way for Monti, chided judges for pursuing Finmeccanica, saying it simply acted like foreign competitors to win sales. Monti in turn said on Friday Berlusconi was being "provincial".

The companies at the centre of the scandals, which account for nearly 30 percent of Italy's blue-chip stocks index, have suffered heavy falls in their share prices in recent weeks.

Finmeccanica lost 11 percent in value in two days after the arrest of Orsi. Centre-right politicians criticised not only the judiciary but also Monti's government, arguing ministers should have replaced Orsi last year when he was first investigated.

CORRUPTION

Italy ranks 72th - between Brazil and Bulgaria - in a Transparency International index that measures corruption in a country as perceived by business managers, one of the worst scores among rich Western nations. Major EU competitors France and Spain rank 22nd and 30th, while Germany is in 13th place.

All of Italy's main parties have been implicated in graft, leaving many voters with the feeling that little has changed since the "Tangentopoli" scandals.

Among analysts there is, however, some sympathy for Berlusconi's view that Finmeccanica may be suffering for tougher enforcement in Italy than, they believe, in competitor nations against bribing foreign officials to win international tenders.

"For companies such as Finmeccanica, corruption is in a way the result of globalisation; it's the hidden price that a company must pay to get access to certain markets," said Stefano Zamagni, a professor of economics at the University of Bologna.

"It is obvious that the economic damage is great."

Other major exporting countries also prosecute companies in similar cases of corrupting foreign officials to make sales.

Many in business say they welcome efforts by Monti, a former EU commissioner who is now running for office as a centrist, to crack down on corruption among Italian officials and hope the next administration can help improve their country's reputation.

Though less ambitious that Monti's original proposal, parliament endorsed new measures in November to increase penalties for demanding bribes and other abuses of office.

"The current

Single Page Format
Ads by Google
Reader´s Comments
| Post a Comment
Please Wait while comments are loading...