No time to lose, warn politicians worried about Italian business leaders By Reuters

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© Reuters. FILE PHOTO: An employee works at a ceramics factory where workers start their shift before dawn to optimize sunlight and save energy, in Citta di Castello, Italy August 30, 2022. REUTERS/ Jennifer Lorenzini/File Photo

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By Valentina Za and Elvira Pollina

CERNOBBIO, Italy (Reuters) – Italy cannot afford weeks of political inertia after this month’s election, business leaders said, adding sky-high energy prices are already forcing more and more companies to reduce their production.

Gathered on the shores of Lake Como for the annual Ambrosetti Forum this weekend, business owners slammed politicians for ousting Prime Minister Mario Draghi amid an energy crisis in Europe.

“Before the ministers of the new government get their bearings it will be Christmas, but we are facing problems that need to be solved in days, not weeks,” said Armando De Nigris, chairman of the vinegar maker balsamic of the same name.

Record petrol prices have more than doubled the cost of condensing the grapes that go into the 35 million bottles of balsamic vinegar De Nigris produces each year.

“We risk producing something that we can’t sell in six months because we can’t pass on price increases,” he said.

A centre-right bloc is on track for a clear victory in the September 25 election, but government formation is a notoriously slow process in Italy.

Industry lobby Confindustria warned last week that Italy was facing “an economic earthquake” due to rising energy prices and called for support from the interim administration led by former chief of staff Draghi. European Central Bank.

Italy has already earmarked more than 50 billion euros this year to try to mitigate the impact of rising energy costs for businesses and households and further aid is expected this week.

RECOVERY FUNDS AT RISK?

Riccardo Illy, chairman of food group Polo del Gusto which owns French tea brand Damman Freres and chocolate brand Domori, feared Italy was missing out on some of the European funds pledged for its post-COVID recovery.

“Draghi could have continued until the end of his mandate (…) whoever comes next will lose us billions of euros,” he said. Italy is in line for some 200 billion euros but the funds are conditional on the implementation of a series of reforms.

Dependence on Russian gas and a large manufacturing sector made up mainly of small businesses make the Italian economy particularly vulnerable to the energy crisis.

Since the start of the conflict in Ukraine in February, many companies in energy-intensive sectors such as steel, glass, ceramics and paper have been forced to cut production due to high production costs.

“When the next (economy) minister sets out to solve our problems – and we can only hope he will be the best of ministers – it may be too late,” said Romano Pezzotti, who heads the metal recycling company Fersovere near the city of Bergamo in the north of the country.

“After making the big mistake of toppling the government in the worst crisis of the last century…politicians will again have to look to someone who can solve the country’s problems,” he added. .

The energy crisis casts the longest shadow.

“We all know what needs to be done,” said Matteo Tiraboschi, executive chairman of high-end brake maker Brembo, a major company listed on the Milan Stock Exchange.

“The energy bill in Italy has practically doubled.”

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