ITALY

Strong recession following the Covid-19 crisis

A2

MEDIUM RISK for entreprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

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GDP USD2083bn (World ranking 8, World Bank 2018)
Population 60.43mn (World ranking 23, World Bank 2018)
Form of state Republic
Head of government Giuseppe Conte (PM)
Next elections 2023, legislative
  • Well-diversified export sector
  • Strong manufacturing base
  • Low private debt burden
  • Primary fiscal surplus
  • Strong domestic investor base for public debt
  • Elevated policy uncertainty
  • High public debt burden
  • Fragile banking sector
  • Rigid business environment
  • Low R&D expenditure

Trade structure by destination/origin

(% of total)

Exports Rank Imports
Germany 12%
1
16% Germany
France 10%
2
9% France
United States 9%
3
7% China
United Kingdom 5%
4
6% Belgium
Spain 5%
5
6% Netherlands

Trade structure by product

(% of total)

Exports Rank Imports
Other industrial machinery and parts 10%
1
11% Road vehicles
Road vehicles 8%
2
6% Petroleum, petroleum products and related materials
Specialised machinery 6%
3
6% Medicinal and pharmaceutical products
Medicinal and pharmaceutical products 5%
4
5% Electrical machinery, apparatus and appliances, n.e.s.
Articles of apparel & clothing accessories 5%
5
4% Other industrial machinery and parts
The payment behavior of domestic companies is poor and the average DSO is excessive, even though the regulations on late payments are more constraining than the applicable EU rules.

  • Low

  • Medium

  • Sensitive

  • High

  • Payments

  • Court proceedings

  • Insolvency proceedings

Procedural delays and costs are high whilst enforcing court decisions may prove to be a real challenge. Thus, commencing legal action without first establishing a pre-legal collection strategy is unreasonable.

When the debtor is insolvent, debt renegotiation mechanisms have been put into place but they remain mostly unused in practice. Liquidation (bankruptcy) therefore remains the default route, but leaves limited opportunities for unsecured creditors to recover their debt.

Contact

Euler Hermes

Economic Research Team

research@eulerhermes.com

Katharina Utermöhl

Country Risk Analyst

katharina.utermoehl@allianz.com

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