(Bloomberg) --
Italian businesses struggling to survive the coronavirus crisis need cash now. What they're getting instead is finger-pointing as the government and banks blame each other for the slow delivery of desperately needed economic relief.
Two months after the government promised to unlock as much as 740 billion euros ($800 billion) to mitigate the economic damage, just a fraction of that sum has been received by firms and families. Of some 300,000 companies that asked for emergency unemployment benefits for their workers, less than one in ten has received them. Just six larger companies had been granted a state-backed loan as of May 12, according to the Bank of Italy.
Deputy Finance Minister Antonio Misiani is leading the criticism of the country's banks, which are the main vehicle to deliver the government-backed support. He said some lenders are “unacceptably slow” due to too much bureaucracy and need to do more to get cash to borrowers more quickly.
“There are banks that provide loans in 72 hours, others that, because of their internal processes and multiple checks, take much longer,” Misiani told Radio24 on Monday. “Is this a fault of the legislator? Taking responsibility is a duty for everyone.”
Banks Blame Rules
The Italian Banking Association has pushed back, saying the rules are too complicated and urging the government “to evaluate legal and technology changes to simplify, speed up and make more efficient the measures to spur liquidity.”
Lenders have requested state backing for some 155,000 loans worth over 7.8 billion euros, the finance ministry said on May 12.
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Intesa Sanpaolo SpA, Italy's biggest bank by market value, has initiated procedures for suspending payments on loans and mortgages, and committed as much as 50 billion euros in new credit lines for companies and families, Chief Executive Officer Carlo Messina said earlier this month.
“The government is trying to fend off criticism by shifting the blame to banks,” said Fabrizio Bernardi, an analyst at Fidentiis Equities. “There is a certain degree of confusion regarding the way the liquidity is granted, with bureaucracy being the main issue. That said, smaller banks historically have lower efficiency and it's likely that they are taking more time to deal with client requests.”
Money Maker
Some bank workers tell a different story, according to Lando Maria Sileoni, secretary general of bank employees union Fabi.
“Some banks believe they can make a little money” from the 25,000-euro state-backed loans that the government introduced, Sileoni said on Rai 1 radio, according to news agency Ansa. “Externally, they say one thing, while internally they give indications of going in the opposite direction.”
Prime Minister Giuseppe Conte, who asked lenders for “an act of love” in getting money to firms quickly, conceded that there have been shortcomings. On May 1 he apologized to Italians for bureaucratic delays of pledged assistance to workers and small businesses adding that new measures in the pipeline and will be “stronger, faster, more direct.”
Two weeks later, Italians are still waiting for those measures, as a new stimulus package promised for early April is still being discussed by coalition parties.
Italy High Frequency Data Dashboard
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