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Free AccessMNI INTERVIEW: Italy Confindustria VP Backs Brexit Trade Deal
By Silvia Marchetti
LONDON (MNI) - Lisa Ferrarini, vice president at Italy's industrial lobby
Confindustria, called for a speedy conclusion of Brexit negotiations saying that
a "transition" period was necessary for firms to adapt and that it would be best
if the UK remained as close as possible to the common market.
In an exclusive interview with Market News, Ferrarini, in charge of
European affairs for Italy's largest business group uniting over 150,000 firms,
also backed the rapid completion of the banking union with the common deposit
guarantee scheme implemented and the common market strengthened.
"In the negotiations over the UK's exit from the European Union, a solution
is needed that reinforces the competitiveness and growth of the entire bloc and
preserves the integrity of the common market's freedom of movement of goods,
services, people and capital, while maintaining at the same time the closest
possible economic relations between the EU and the UK", she said.
Ferrarini said that in order to address a future trade deal with the UK it
was of paramount importance to speedily bring to an end the first phase of
negotiations and to find a way through the "critical issues" that have caused a
stalemate in talks.
Italian firms must be prepared for the post-Brexit scenario, she said, "but
to support this we need transition solutions that guarantee certainty of
regulations and allow businesses to adapt to the new future relationship"
between London and Brussels.
In Ferrarini's view Europe is undergoing a deep "crisis of trust" that is
putting at stake the integration process, topped with global challenges such as
the increasing competition of China and the US.
Europe's industrial core can play a major role in re-launching the
integration project but it needs to be supported by stronger EU policies focused
on innovation, research, greater investments and a more efficient common market.
"The common market must be reinforced. It is Europe's strategic asset.
Bureaucratic and regulatory barriers must be simplified and eliminated (where
possible), fragmentation of regulations must be avoided while controls boosted
and sanctions imposed on member states that do not respect the rules", said
Ferrarini.
Confindustria is sponsoring a package of EU reforms, including the creation
of a common EU budget and a EU Finance Minister, together with its sister
groups, Germany's BDI and France's Medef.
"We're bringing forth a common agenda with the goal of pursuing a
growth-oriented Europe", said Ferrarini.
The completion of the banking union remains a top goal, linked to the
creation of a common capital market that could put an end to Europe's weak
credit flows.
"Bringing to completion the banking union is essential if we want to break
the vicious circle between banks and sovereign debts and preserve the financial
services' common market", she said.
Despite the resistance of certain member states to more burden-sharing, the
implementation of the banking union's missing third pillar - the common deposit
guarantee scheme to backstop lenders in case of default - is unavoidable and
must be pursued, Ferrarini said.
Europe's financial sector would benefit from a completed, strong banking
union. Despite progress made in Europe's banking sector since 2009, which
according to Ferrarini has become more "stable and resilient than it was before
the crisis outbreak", a lot still needs to be done to avoid future shocks and
turn economic recovery into structural growth.
"The (banking) regulatory framework must be coherent in balancing the goals
of financial stability and that of funding to the real economy. Finance remains
a strategic tool to boost growth and competitiveness, that's why the banking
channel is essential and must be revitalised", said Ferrarini.
Weak credit flows are among the main obstacles to growth, both in Italy and
in the Eurozone, as they continue to hamper investments and firms' innovation,
she said.
To support the expansion of businesses it is essential to integrate and
widen the EU's capital markets and support small-and-medium (SME) enterprises to
access diversified funding sources, including cross-border capital flows.
Confindustria has consistently warned that the European Central Bank's
accommodative monetary policy would sooner or later start to unwind and even
though it is crucial to exploit the door of opportunity it now offers, member
states and businesses must prepare to face more restrictive policies in the long
run.
The ECB's recent decision to slow its asset purchase program scheme had
been predicted by markets and therefore had no negative effect on Italy's
Treasury bonds, according to Italy's industrial group, but the central bank's
new, binding rules on non-performing loans (NPLS) could tighten credit flows in
a critical moment when Italy's economy is growing again.
--MNI London Bureau; tel: +44 203-586-2223; email: david.robinson@marketnews.com
[TOPICS: M$B$$$,M$E$$$,M$I$$$,M$X$$$,MC$$$$,MX$$$$,MGB$$$,MGX$$$]
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.