by Marzia De Giuli
MILAN, Sept. 25 (Xinhua) -- Spanish Telefonica's deal to tighten its hold on Telecom Italia, the latest in a series of takeovers of major Italian companies, has further raised concerns in the troubled country.
Under the terms of an agreement announced earlier this week, the Spanish carrier will take a majority stake in Telco, Telecom Italia's holding company, with an option to move to 100 percent control next year.
Observers say the operation is "a defeat for 'Made in Italy'." Giacomo Stucchi, president of the parliamentary committee that oversees the Italian intelligence services, said it also posed "serious problems for national security."
Meanwhile, Air France and the KLM, which together own about 25 percent of airline Alitalia, are considering whether to increase their holdings of the Italian flag carrier.
Prime Minister Enrico Letta said there must not be barriers to capital flow. He added, however, that his government did "not want to lose the strategic aspect" of the country's largest telephone company. Spinning off the fixed-line network is an option, though Telecom Italia Chairman Franco Bernabe said the "final outcome is not a given and, in any case, requires far more time."
Meanwhile, Deputy Economy Minister Stefano Fassina has declared "Italy certainly cannot sell off Alitalia."
Economist Mario Deaglio told Xinhua: "Though we must be neutral with the solution, what matters is not the nationality of the capital nor the flags but that the competitive conditions and reciprocity are promoted."
A number of iconic companies in the eurozone's third largest economy, in areas ranging from food to technology and fashion, have been acquired by foreign groups in recent years.
Deaglio said the gradual impoverishment of Italy's industrial system had its roots in the country's short-sighted policies: politicians had always focused on immediate advantages, entrepreneurs refused investment risks and unions only acted in the interest of workers.
Remedies are not easy but possible. "It should be the responsibility of government, like in other European countries, to protect the crucial assets of companies that need foreign capital to survive," he said.
In the cases of Telecom Italia and Alitalia, it was fundamental Italy exploited the full potential of next-generation networks and its airports continued to be central in Alitalia routes, the economist said.
Giuseppe Berta, a business professor at Bocconi University in Milan, said, in the postwar period, Italy had "a classic industrial system, with a group of big companies, both public and private, which led to economic growth alongside an enormous number of small and micro companies."
This structure gradually fell apart. "Italy gradually lost its historic brands and was unable to replace them with new ones. The medium companies did not grow into a sufficient size to drive development, and a modern service industry was never born," he said.
Berta told Xinhua Italy managed to introduce "some new ideas of development in the 1980s and 1990s, such as industrial districts and 'Made in Italy.'" But this was not enough and Italy had "become the only country in Europe which no longer has an economic structure."
Berta said the present Italian economic vision was planless. Gross domestic product was destined to fall again by far more than 1 percent this year, and there were no signs yet that the country might be starting to recover from its longest recession since World War II.
"No nations can start a growth process if they are constantly short of breath after fixing emergencies. Do we have an idea of what the centerpiece of our economy should be, of what sectors should drive development?" Berta asked.
Italy was in urgent need of an answer to these questions, the expert warned, or it would continue to lose its economic weight in the world.