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Friday, November 28, 2008
Italy Announces $103.2B Rescue Package
Associated Press
MILAN, Italy--The Italian government on Friday announced an euro80 billion ($103.2 billion) emergency package offering relief to banks, families and companies suffering in the global economic crisis.
The package, which is part of a proposed euro200 billion European Union effort to combat the world economic downturn, includes aid to needy families, public works projects and mortgage relief.
"The middle class can maintain the same lifestyle," Premier Silvio Berlusconi told a news conference in Rome after his Cabinet approved the measures. "The length of the economic crisis depends on all of us, on our capacity to trust and to look at the future with hope."
The measures include euro2.4 billion cash payments for needy families -- expected to reach 8 million people. Other funds are earmarked for infrastructure, such as structural improvements to schools after a week that saw one student killed when a classroom roof collapsed, and a separate fund of euro960 million for the national railway.
Under the decree approved at a Cabinet meeting Friday, highway tolls will not be increased for the first six months of the year. The emergency measure must be approved by Parliament, where Berlusconi's conservatives enjoy a comfortable majority.
The government also agreed to underwrite convertible bank bonds to help raise capital for the banks. It previously passed
a measure to buy preferential stock without voting power for any bank in need, but none have yet sought the relief.
The measures also put a 4-percent cap on variable mortgage rates already in hand, and from Jan. 1 link future variable mortgages
to interest rates set by the European Central Bank.
Berlusconi also said the government planned to reduce public debt now at 150 percent of GDP to 100 percent of GDP by 2011.
Finance Minister Giulio Tremonti said that the package would not have any impact on the three-year budget adopted in July.
"It is because we had the budget in place that we were able to undertake these measures," Tremonti told reporters.
Italy, Europe's fourth-largest economy, officially entered a recession in the third quarter.
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Most folks judge the health of a business by the revenue that comes in through sales. But not all revenue is equal. Companies can grow their sales by buying other companies, which means you don't get a clear view of how the real sales trends are moving.
So, many analysts, particularly those who look at retail, try to gauge what¿s known as "organic" growth, by looking at same-store sales. These are sales only at outlets open more than a year, so the metric can exclude any sales jump that comes from opening new locations. Retailers release same-store sales (which are frequently called "comps" since they're a true comparison from the previous period) every month.
Retail, incidentally, isn't the only industry to look at same-store sales. Hospital companies, also use the metric, to gauge how existing hospitals are performing compared to ones they just built or acquired.
