Italian companies in Brazil don’t wait for politics

Mar 8, 2018

In the interview with Ansa, dr. Graziano Messana talks about the political scenario in Italy and the investment prospects of Italian companies in Brazil.

You can also see a little more about the Italian presence in Brazil here.

No party or coalition has won a majority in Parliament to govern, which will require alliances with rival groups so that Italy can have a new prime minister without the citizens having to go to the polls again.

“A scenario could envisage a technical government to approve a new electoral law and convene the elections again”, says Graziano Messana, CEO of GM Venture, who manages foreign companies and branches in Brazil, and vice president of the Brazilian-Brazilian Chamber of Commerce, industry and agriculture (Italcam).

In the following interview, he talks about the political scenario in Italy and the investment prospects of companies in the European country in Brazil.

ANSA – What is your assessment of the post-electoral situation in Italy?

GM: There is no coalition or party with an absolute majority, either in the House (316 deputies) or in the Senate (161 senators). Although the centre-right has had more seats in both chambers, it does not have a majority to govern. Within this coalition, the Northern League has grown to 17% and Berlusconi’s party has stood at 14%. But the big news is the 5 Star Movement (M5S), which with over 32% has become the first party. The centre-left has had a significant defeat with the fall of the party of the former prime minister Matteo Renzi (PD), who announced his resignation at the command of the party.

ANSA – What challenges will the M5S have to form a government?

GM: The big challenge for the M5S is now. They have to show they can govern and for this, they have to make alliances, which is not easy. Or they can bet on new elections to try to increase their votes and reach an absolute majority. Both roads are difficult and full of danger for a movement that has never assumed the responsibility of the government at the national level.

ANSA – In your opinion, what are the possible scenarios for government negotiations in Italy?

GM: If everyone remains faithful to the positions announced before the elections, the Democratic Party (PD) should not support the M5S. The Northern League will remain in the coalition with Berlusconi and should not support the M5S – and I hope this does not happen because both are lined up against the European Union.

In short, there would not be a stable settlement to be governed, and a scenario could be for a technical government to pass a new electoral law and call for new elections. Even if he was defeated at the polls, the PD will be the faithful of balance. We have three possible scenarios: alliance with the centre-right, with the M5S or opposition. The latter is the choice declared by the party secretary, Matteo Renzi. If so, it seems inevitable that Italy will have to vote again, which scares the markets.

ANSA – Even if the parties manage to form a cabinet, Italy risks having an unstable government again?

GM: The situation we now have in Italy is the result of an electoral system and an institutional architecture that must be improved and do not work well. One thing that must be clear is that every parliamentarian has confidence in the person, not at the party. It is free during the legislature to change party, move from left to right and vice versa, to organize itself into groups that can threaten the created majority and easily overthrow governments. There is no longer the ideological characterization of the “First Republic” since 1992 when the “Mani Pulite” operation destroyed the traditional parties. This causes a great parliamentary “transformation”.

ANSA – How can this scenario influence the investments of Italian companies in Brazil?

GM: In Brazil, we are lucky to have a very good “Sistema Italia”. I speak of the action of the Embassy, ​​of the Consulate, of the Italian Trade Agency and of the Chamber of Commerce, which in recent years has strongly supported exchanges between countries. Ambassador Antonio Bernardini has been extremely active and determined in this complex period of Brazilian crises and has given rise to numerous and excellent initiatives. In several sectors, Italian companies did not wait for the policy, like Gavio, who controls EcoRodovias and in January invested another R$ 883 million. And Granarolo, the largest Italian agri-food operator, which has acquired 60% of Allfood here in Brazil. In the financial sector, the main Italian bank, Intesa Sanpaolo, has invested in Brazil in the long term, transforming its branch into a multiple banks and growing, supporting various Italian companies. And the Azimut group has acquired four companies in Brazil and now has R$ 7 billion in assets under management.

ANSA – Which sectors have more opportunities for Italian investments in Brazil?

GM: There is fertile ground for business, and the experience and potential of Italian companies can make the difference. The Brazilian looks at the Italian lifestyle loves technology and has increased the use of residential and commercial automation. Cosmetics, digital security, renewable energy and internet of things are sectors in which Italian companies have a competitive advantage to enter Brazil, in addition to the traditional “3F” (Food, Fashion & Furniture).

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