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Italy quake: can the cash-strapped government help victims recover? by ferujkll sdff
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Italy quake: can the cash-strapped government help victims recover? |
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Business,Business News,Business Opportunities
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Dante Caretti thought business was good until he woke to the crashof collapsing shelves in the rooms where he was aging 32,000 wheelsof Parmesan cheese. The 5.9-magnitude earthquake that struckItaly's agriculturally rich Emilia Romagna region on Sunday killedat least seven people, displaced thousands of others, and reducedhomes and historical monuments to rubble. For Caretti, it alsomeant his family's 84-year-old company could be out of 13 millioneuros ($16.6 million) worth of cheese that took two years toproduce. "We felt things were going well for the business and then theearth's force let itself be felt," Caretti, 70, a fourth-generationcheesemaker in the town of San Giovanni in Persiceto, tells TIME."I'll have to fight the insurance company to recoup at least 50% ofmy loss.
It's not like a car accident and you file a claim for10,000 euros." (PHOTOS: Earthquake in Northeast Italy Kills 4, Cracks Bell Towers) It's too early for the government to put a pricetag on the damageto businesses, churches, homes and cultural sites caused by theworst tremor to hit Italy since a 6.3-magnitude quake rattled thecentral Italian Abruzzo region in April 2009, killing more than 300people. Just counting losses in the agriculture sector, however,the Coldiretti farmers' association said around 400,000 parmesanwheels were lost in Sunday's quake, as well as livestock andequipment, all valued at around 200 million euros ($250 million). The timing of a natural disaster on this scale couldn't be worse.Italy's recession is worsening and the government has made deepcuts in spending to try to save money and slash the world'sfourth-largest debt. Whatever faith Italians had in the interimgovernment led by Prime Minister Mario Monti has also been dryingup, as tax hikes and pension and labor reforms have come intoeffect and the unemployment rate has continued to rise. That angerwas evident when Monti cut short his trip to the NATO summit inChicago to visit the quake-damaged area in northern Italy.
During astop in the town of Sant'Agostino, where four factory workers werekilled, he was greeted with jeers. "Thieves, shame, go home," agroup of hecklers called out. "The state should help its citizensnot its banks," one woman told Italy's Sky news channel. (LIST: Top 10 Deadliest Earthquakes) "The country is pretty depressed and we need a series of good newsto boost morale," says Giorgio Barba Navaretti, an economicsprofessor at the University of Milan.
"It's not a major earthquake,but given the fiscal condition of the Italian state, it's hard tosee where the resources will be found (for disaster relief)."Navaretti says the government may choose to take advantage of a newlaw that allows it to raise funds for natural disasters by boostingtaxes on diesel and gasoline. Italians tend to be generous duringtimes of disaster, but a new fuel tax right before the country hitsthe road for summer vacation might test their solidarity. Monti did declare a state of emergency on Tuesday, allowing him torelease emergency funds to pay for feeding and housing thedisplaced. He's also considering suspending tax payments in themost-affected areas. But because Italy is carefully monitoringpublic spending, the government won't foot the bill for all thedamage caused by the quake.
This will be left to the individualbusinesses and households that suffered losses, even if banks havebeen extremely cautious — some critics say stingy — inextending credit to people. Edoardo Liuni, an equity analyst at thefinancial services firm Trading Room Roma, says this is a chancefor Monti to regain public support by leaning on lenders to helpvictims get back on their feet. "There was a lack of governmentresponse in stimulating economic growth. Now it will be up to themto respond to the quake by opening lines of credit," he said. (VIDEO: Interview with Italian Prime Minister Mario Monti) Mirco Tartari, a 48-year-old farmer in the Emilia Romagna region,would agree.
The quake nearly completely destroyed a 140,000-euro($180,000) solar electricity plant he installed on his 49-acrefruit farm near the small medieval city of Ferrara. His businesssuffered a loss in 2011 and a hailstorm earlier this year killedabout 40% of his crop, meaning 2012 will probably end badly, aswell. Now, the very survival of his business is at risk and Tartarineeds cash or he may have to call it quits. "It's almost impossibleto get bank credit. I used almost all my credit for the solarplant," he tells TIME.
"I'm afraid that things will go bad and I'llhave to close the company." See TIME's Pictures of the Week. See the Cartoons of the Week. I am a professional writer from Business Bags & Cases, which contains a great deal of information about hand label applicator , metallized polyester film, welcome to visit!
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