The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
MILAN, Italy — What's more Italian, high fashion or high debt? One could be the key to resolving the other, Italy's government is expected to say, after it came under fire for the state of its finances.
With the European Union firing a warning shot at the country for running up debt so high it could lead to a multi-billion-euro penalty, Rome may cite revenue deriving from a top luxury brand as evidence it can get its house in order.
A 1.25 billion-euro ($1.4 billion) payment by Kering SA to end a dispute over Italian subsidiary Guccio Gucci SpA's back taxes could be a key part of Rome's response to the EU's request for an explanation, people familiar with the nation's public accounts said.
Italian bonds declined on Friday, pushing yields on the nation’s 10-year debt back above 2.7 percent. The premium over German bunds, Europe’s benchmark, is at the widest in almost six months.
In a letter Wednesday, the European Commission said it’s considering whether to propose a disciplinary procedure which could lead to a 3.5 billion-euro penalty. But the deal with Kering could allow the Rome-based government to say it’s making progress in coming to grips with a debt load amounting to over 132% of the nation’s economic output.
The treasury is weighing citing the Gucci tax settlement along with an improved economic outlook, spending cuts as well as revenue from future privatisations, said the people, who asked not to be named citing the confidential nature of the reply letter.
Finance Minister Giovanni Tria will also maintain in his reply to the EU that the country’s debt is manageable and sustainable, daily la Repubblica reported on Friday.
Separately, Corriere della Sera reported the finance minister’s letter will reiterate the need for growth-friendly policies and the willingness to sell state assets to reduce the debt load.
By Lorenzo Totaro; editors: Fergal O'Brien, Jerrold Colten.
Related Articles:
From analysis of the global fashion and beauty industries to career and personal advice, BoF’s founder and CEO, Imran Amed, will be answering your questions on Sunday, February 18, 2024 during London Fashion Week.
The State of Fashion 2024 breaks down the 10 themes that will define the industry in the year ahead.
Imran Amed reviews the most important fashion stories of the year and shares his predictions on what this means for the industry in 2024.
After three days of inspiring talks, guests closed out BoF’s gathering for big thinkers with a black tie gala followed by an intimate performance from Rita Ora — guest starring Billy Porter.