News Archive

Inside OPEC room, Naimi declares price war on U.S. shale oil

VIENNA (Reuters) – Saudi Arabia’s oil minister told fellow OPEC members they must combat the U.S. shale oil boom, arguing against cutting crude output in order to depress prices and undermine the profitability of North American producers.

Ali al-Naimi won the argument at Thursday’s meeting, against the wishes of ministers from OPEC’s poorer members such as Venezuela, Iran and Algeria which had wanted to cut production to reverse a rapid fall in oil prices.

They were not prepared to offer big cuts themselves, and, choosing not to clash with the Saudis and their rich Gulf allies, ultimately yielded to Naimi’s pressure.

“Naimi spoke about market share rivalry with the United States. And those who wanted a cut understood that there was no option to achieve it because the Saudis want a market share battle,” said a source who was briefed by a non-Gulf OPEC minister after Thursday’s meeting.

Oil hit a fresh four-year low below $72 per barrel on Friday [O/R]. A boom in shale oil production and weaker growth in China and Europe have sent prices down by over a third since June.

“You think we were convinced? What else could we do?” said an OPEC delegate from a country that had argued for a cut.

Secretary General Abdullah al-Badri effectively confirmed OPEC was entering a battle for market share.

Asked on Thursday if the organization had a answer to rising U.S. production, he said: “We answered. We keep the same production. There is an answer here”.

OPEC agreed to maintain — a “rollover” in OPEC jargon — its ceiling of 30 million barrels per day, at least 1 million above its own estimate of demand for its oil in the first half of next year.


Analysts said the decision not to cut output in the face of drastically falling prices was a strategic shift for OPEC.

“It is a brave new world. OPEC is clearly drawing a line in the sand at 30 million bpd. Time will tell who will be left standing,” said Yasser Elguindi of Medley Global Advisors.

The OPEC delegate from one of the countries that wanted a cut, said: “OPEC has lost credibility,” and added: “I don’t know how practical it is to try to kick shale out of the market.”

Several OPEC ministers who wanted a cut left the meeting room visibly frustrated and kept silent for several hours although when they spoke later they said they accepted the decision.

“We are together,” said Venezuelan Foreign Minister Rafael Ramirez when asked whether there was a price war within OPEC.

“OPEC is always fighting with the United States because the United States has declared it is always against OPEC… Shale oil is a disaster as a method of production, the fracking. But also it is too expensive. And there we are going to see what will happen with production,” he said.

A Gulf delegate said Naimi had reassured members that the oil price would recover as demand will ultimately pick up. But he insisted that if OPEC cut output it would lose market share.

“Reaching a final decision took a lot of time convincing the others,” said another delegate.

Several analysts and oil executives have suggested it would take many months to have an impact on U.S. oil production.

Even some Gulf delegates said they were not convinced Naimi’s gamble would work. One said: “If they are really after U.S. shale, how much would this rollover slow them (U.S. producers) down?”

(Additional reporting by Rania El Gamal and Shadia Nasralla; Writing by Dmitry Zhdannikov; Editing by Robin Pomeroy)

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Speculators increase bets that Brent crude will fall to $65 in first quarter

LONDON (Reuters) – The main bet that oil speculators are making for the first few months of next year is that a barrel of Brent crude will fall to $65, according to options market data.

Speculators increased these positions before the OPEC meeting in Vienna this week, as expectations rose that it would not cut production – which turned out to be correct.

Brent crude futures LCOc1 fell by more than $6 a barrel following Thursday’s decision, hitting a fresh four-year low of $71.12 a barrel on Friday in the biggest weekly slide in three-and-a-half years. [O/R]

ICE options open interest data, which is only available up to Nov. 26, shows that the open interest in put options at $65 a barrel on the March 2015 contract soared to 15,673 lots from close to zero at the start of November, making it one of the largest expiries of 2015.

A put is an option which gives the holder the right to sell an asset at a particular price, and amounts to a hedge or a bet that prices will fall.

Open interest – the number of future or options contracts investors currently own – in $65 puts for the February, March and April contracts now amounts to 35,323 lots, or the equivalent of 35.32 million barrels of oil, outranking puts at $70 and $80, the two other key strike prices.

Options traders and brokers said there had been a large increase in put spread buying ahead of the OPEC meeting as people looked for downside protection.

“Options became expensive,” one trader said, adding that volatility had “exploded” in the immediate run up to the meeting.

Implied volatility, one way to gauge an option’s value, hit a three-year high of 36 percent on Thursday, driven by the uncertainty over OPEC’s decision. This compares with an average of 18 percent so far this year.

Harry Tchilinguirian, head of commodity markets strategy at BNP Paribas, said this was up from around 15 percent in the summer: “Implied volatility has been bid up as more people sought protection.”

Since OPEC’s announcement, implied volatility has eased back to 33 percent.

Looking further ahead, the most open interest for the coming year is in $80 puts on the June contract, with 23,519 lots. This position hit a life-of-contract high above 30,000 lots in late October, having trebled in the space of three weeks.

(Reporting by Claire Milhench; Additional reporting by Amanda Cooper; Editing by Robin Pomeroy)

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BMW not interested in buying stake in Tesla: Wirtschaftswoche

FRANKFURT (Reuters) – Germany’s BMW (BMWG.DE) is not interested in buying a stake in U.S. electric carmaker Tesla Motors (TSLA.O), German weekly WirtschaftsWoche reported on Friday, citing a BMW statement.

Earlier this week, a Tesla spokeswoman said there had been informal talks between the companies, but there were no plans to set up an alliance.

(Reporting by Harro ten Wolde; Editing by Ludwig Burger)

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Standard Chartered hit with first S&P downgrade in 20 years

LONDON (Reuters) – Ratings agency Standard Poor’s (SP) cut its credit rating on Standard Chartered (STAN.L) for the first time in 20 years on Friday, citing the “tough period” the Asia-focused bank was going through and its weaker credit-worthiness.

SP cut its long-term issuer credit rating on Standard Chartered Plc to ‘A’ from ‘A+’, with a negative outlook — a move that could make it more expensive for the bank to borrow money.

It was SP’s first downgrade since it assigned Standard Chartered a rating in 1994, which was followed by upgrades in 1995, 2006 and 2011.

It said the bank “is going through a tough period of late” after years of solid growth and strong financial performance.

“We lowered the ratings because we consider the Standard Chartered group’s creditworthiness to have weakened when compared with its peers,” said SP credit analyst Joseph Leung.

At 1330 GMT (8.30 a.m. ET), Standard Chartered shares were down 0.2 percent at 938.12 pence, in line with Britain’s benchmark FTSE-100 index .FTSE.

The bank has said it expects a second successive fall in annual profits this year, halting a decade of record earnings. Last month it issued its third profit warning of the year after a jump in losses from bad debts.

Its problems have raised the heat on Chief Executive Peter Sands, who has set out a plan to cut costs and restructure the business to kick-start growth.

SP said it lowered the bank’s risk position assessment to ‘adequate’ from ‘strong’.

“This reflects our view that the group is no longer materially less exposed to unexpected losses than peers,” it said.

SP said weaknesses at the bank included its complex operations and the concentration of loans in single borrowers.

It said the bank was well funded and liquid, however, and was diversified by region and asset class, and that asset quality should “remain steady at worst” in 2015 versus 2014.

(Reporting by Steve Slater; Editing by Mark Potter)

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ECB’s Nouy says banks must show they can make profits

LONDON (Reuters) – Euro zone banks that failed or scrapped through this year’s health checks will have to demonstrate they can make sustainable profits and may need to sell off loss-making units, the European Central Bank’s top banking supervisor said.

Daniele Nouy, who heads the ECB’s banking supervisory arm, told Reuters on Friday that simply finding more capital to plug shortfalls uncovered by the stress test may not be enough.

“Partly because of the financial situation in Europe and partly because of the structure of the banking systems in Europe … the sustainable profitability is probably the main challenge and the main risk for banks in the coming years,” Nouy said.

“They have to establish sustainable profitability.”

She added: “There are a number of banks that went through the comprehensive assessment, but might not go through next time.”

From this month, the ECB became the direct supervisor for the single currency area’s top 120 banks like Santander (SAN.MC), BNP Paribas (BNPP.PA) and Deutsche Bank (DBKGn.DE) with powers to force them to top up their capital buffers or make other changes to keep them safe and sound.

Nouy has already asked some of the banks who struggled in the stress test to resubmit their plans for reinforcing their capital buffers. The supervisor is now also taking into account a broader consideration of banks’ business models, which marks a departure from their earlier narrow focus on capital levels.

“When we review the capital plans of the banks with a shortfall now it’s totally about business model, it’s the most important dilemma,” she said.

“We are not considering that one category of business model is better than another,” she said.

“A lot of bankers are not in denial. They may not be rushing to take measures, but they know this is something they will have to address.”

Jose Vinals, director of monetary and capital markets at the IMF, last month said an IMF study showed only about 30 percent of eurozone banks had a structure able to deliver a reasonable rate of return over time to build capital and support new lending, compared to about 80 percent in the United States.


Nouy, a former Bank of France senior official, warned struggling banks resorting to hybrid debt or contingent capital, which she dubbed “catastrophe capital” because it is written down or converts into equity when a bank is near collapse, to bolster their safety buffers.

“If the bank is not profitable, do we want the bank to use contingent capital with a costly coupon? We are not sure.”

One of the key markets the ECB is trying to push as part of its efforts to revive lending in Europe is the securitisation market, which collapsed during the financial crisis.

The ECB is pushing for lighter capital charges on top quality securitised debt but Nouy made clear that she would not be in favour of laxer capital rules.

“As a supervisor, I am not ready to make a regulatory gift or supervisory gift. I think it can fly very well just by simplicity on high quality. Those are not risk-free assets,” she said. “I hope there is a enough good paper to get it started.”

The ECB will launch a “supervisory campaign” next year that will scrutinise profitability of lenders, and home in on any concentration of risks or dangers from poor quality loans on their books, and risks from misconduct.

Banks will have to consider whether they should be holding on to loss-making or problematic branches and subsidiaries that are not core to the business.

“Sell your branch or sell your subsidiary if you believe you are not able to control the culture or have proper internal control or put adequate people to manage the bank,” Nouy said.

“A lot of significant losses were taken in places that were of small importance vis-a-vis the rest of the group.”

Nouy said the ECB will check the models each bank uses to tot up risk-weightings assigned to their loans, a core calculation for determining how much capital they should be holding.

These calculations vary so much some regulators have looked for simpler ways such as emphasising the leverage ratio, a broader measure of capital to assets on a non-risk weighted basis.

She said it was unclear whether the next stress test of major lenders in the wider European Union will take place in 2015 as the “post mortem” of this year’s health check was still under way.

(Additional reporting by Steve Slater)

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Japan may expand air bag recalls; worried about impact on industry

TOKYO (Reuters) – Honda Motor and Mazda Motor may have to recall another 200,000 cars in Japan to replace Takata Corp air bags if Takata complies with a U.S. order to recall cars across the United States rather than just in humid regions.

Several automakers in the U.S. have issued regional recalls of certain models to investigate what is causing some Takata air bags to explode with excessive force. U.S. safety regulators have ordered Takata to have those recalls expanded nationwide.

Takata has so far resisted a wider U.S. recall, saying that could divert replacement parts away from the high-humidity regions thought to need them most – due to moisture possibly breaking down the air bag inflator’s chemical mix. Takata has until Tuesday to respond to the U.S. regulator’s order.

Takata and regulators still don’t know exactly why some air bags have proved lethal, with the inflators exploding and shooting metal shards at car occupants. At least five deaths have been linked to such incidents – all in Honda cars.

As U.S. investigations progress, an expanded recall can have a knock-on impact in other markets where cars use air bag inflators from the same potentially problematic batches.

An official at Japan’s transport ministry said a U.S.-wide recall could add 200,000 Honda and Mazda cars to the 2.6 million cars fitted with Takata air bags already under recall in Japan.


Transport Minister Akihiro Ohta said the repeated recalls involving Takata air bags could undermine trust in Japan’s entire auto industry.

“This is an extremely important issue for automobile safety,” Ohta told reporters on Friday. “Japanese manufacturing enjoys a high level of trust so I am worried this situation will shake that confidence.”

He said he instructed Takata to move towards a recall in Japan if piecemeal recalls in hot and humid regions in the United States are expanded nationwide. Ohta has asked Takata to report on how it plans to respond to the U.S. National Highway Traffic Safety Administration’s order for a nationwide recall.

Japan may yet see more recalls for a separate problem reported this month of an “unusual deployment” of a Takata-made air bag in a scrapped car. The inflator was manufactured in January 2003 at Takata’s Monclova factory in Mexico, and had not been subject to previous recalls.

The transport ministry also said it found no irregularities with Honda’s past reporting of accidents in Japan. Honda earlier this week admitted it had under-reported more than 1,700 claims of injuries and deaths related to its cars in the United States since 2003.

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Putin expects oil prices to find balance by middle of 2015

SOCHI, Russia (Reuters) – Russian President Vladimir Putin said on Friday he was confident the oil market would find its balance by the middle of next year.

“I am confident that in the first quarter, in the middle of next year the (oil) market will find a balance,” Putin told a meeting with the chief executive officer of France’s Total (TOTF.PA), Patrick Pouyanne.

Brent crude oil steadied below $73 a barrel on Friday after hitting a fresh four-year low following OPEC’s decision not to cut output.

Putin added he had expected oil prices to fall after OPEC’s meeting and said Moscow had not insisted on any specific action to stabilize them.

(Reporting by Denis Dyomkin; writing by Katya Golubkova, editing by Elizabeth Piper)

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World investors cut stocks and hold cash as uncertainty dominates

LONDON (Reuters) – World investors eased back on their exposure to risk assets such as stocks as they grappled with divergent monetary policies and multi-speed growth paths among major world economies, a global poll shows.

A monthly survey of 47 senior investors in the United States, Europe, Britain and Japan found the average recommended exposure to stocks in global balanced portfolios eased for a second consecutive month to 49.1 percent in November from 49.5 percent.

“The greatest risk remains disappointment on global growth level … Markets remain vulnerable to any negative newsflow on macroeconomic indicators, be it in the Euro zone, in the US or even in China,” Dexia Asset Management said in comment sent to Reuters for the poll.

An end to monetary stimulus, in place since the financial crisis, in the United States and Britain as their economies gather momentum stands in marked contrast to policies elsewhere.

Japan, the Eurozone and China are moving toward boosting money supply to counter sluggish or falling economic growth, leaving investors with an uncertain environment to grapple with.

Many still feel global growth is shaky – as evidenced in recent falls in global oil prices prompted by worries energy demand will be weak.

Global investors’ cash allocations – used as a safe haven in times of volatile markets – eased back to 6.2 percent in November, the poll showed, but remained close to the year’s high of 6.7 percent reached in October.

Allocations to bonds – also seen as a safe haven relative to equities – rose to 36.8 percent from 36.4 percent.

The poll was taken from Nov. 14-27, when world stocks .MIWD00000PUS recovered more of the poise lost during the volatility seen in mid-October and gained close to 2 percent.

The U.S. SP 500 index .SPX set a record high during the survey period, climbing more than 1.5 percent. Emerging-market stocks .MSCIEF also posted a more than 1.5 percent gain during the survey period.

They remain more than 7 percent off a September peak for the year, battered by a strong U.S. dollar luring investment away, fears of China slowing down and fallout from the standoff with Russia over its role in Ukraine.

U.S. fund managers cut their recommended equity allocation in model portfolios for a sixth consecutive month and increased their bond holdings.

Recommended stock holdings for U.S investors fell to 54.4 percent in November from 55.0 percent in the previous month. [US/ASSET]

European investors built up holdings of safe-haven cash by 60 basis points to 8.6 percent. Exposure to stocks was cut to 47.1 percent on average from 47.7 percent a month earlier. [EUR/ASSET]

Japanese fund managers’ allocations to equities inched down to 43.2 percent in November from 43.6 percent in October and allocations to bonds was little changed at 51.8 percent from 52.0 percent the previous month. [JP/ASSET]

British investment managers kept equity allocations at a two-year low this month at 51.7 percent, and property holdings at multi-year highs of 4.7 percent.

They reduced their cash holdings to an average of 8.3 percent, down from last month’s multi-year highs of 11.2 percent but still higher than at any other time in the past year. [GB/ASSET]

(Additional reporting by Sam Wilkin, Rahul Karunakar, Deepti Govind and Shinichi Saoshiro)

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Special Report: Why Italy’s stay-home shoppers terrify the euro zone

ROME (Reuters) – “Three for the price of two” used to be the most common special offer in Giorgio Santambrogio’s supermarket chains. It has barely been used this year. The reason explains why efforts to resuscitate Italy’s moribund economy are failing.

“People aren’t stocking up because they know prices will be lower in a month’s time,” says Santambrogio, chief executive of Vege, a Milan-based association covering 1,500 supermarkets and specialist stores. “Shoppers are demanding steeper and steeper discounts.”

Italy is stuck in a rut of diminishing expectations. Numbed by years of wage freezes, and skeptical the government can improve their economic fortunes, Italians are hoarding what money they have and cutting back on basic purchases, from detergent to windows.

Weak demand has led companies to lower prices in the hope of luring people back into shops. This summer, consumer prices in Italy fell on a year-on-year basis for the first time in a half-century, and they have barely picked up since. Falling prices eat into company profits and lead to pay cuts and job losses, further depressing demand. The result: Italy is being sucked into a deflationary spiral similar to the one that has afflicted Japan’s economy for much of the past two decades.

That is the nightmare scenario that policymakers, led by European Central Bank chief Mario Draghi, are desperate to avoid.

The euro zone’s third-biggest economy is not alone. Deflation – or continuously falling consumer prices – is considered a risk for the whole currency bloc, and particularly countries on its southern rim. Prices have fallen for 20 months in Greece and five in Spain, for example. Both countries are suffering through deep cuts in salaries and state welfare. Yet Italy, a large economy with a huge public debt, is the country causing most worry.

Part of the reason deflation is seen differently across southern Europe is cultural. Greeks and Spaniards are historically big spenders. The Spanish economy surged for a decade thanks to a property and consumption bubble that crashed in 2008. Greece grew strongly in the same period, before being brought to its knees in 2009 by its government’s clandestine finances. This year, falling prices are helping these economies sell more of their products at home and abroad, fuelling a nascent recovery.

Italians, however, are historically big savers. One reason, says Chiara Saraceno, sociology professor at Turin University, is that Italian parents traditionally save for decades in order to buy their children homes when they marry.

Another factor is Italy’s famously cash-based economy. Italy has fewer credit cards per person than any other country in the euro zone except Slovakia, according to ECB data. That dampens consumption because people who use credit cards buy more freely, economists say. Even the houses parents buy their children are often paid in one lump-sum rather than with mortgages.

Like Japan, Italy has one of the world’s oldest and most rapidly aging populations – the kind of people who don’t spend. “It is young people who spend more and take risks,” says Sergio De Nardis, chief economist of the Bologna-based Nomisma thinktank. In recent years, young people have been the hardest hit by layoffs, he says. Many have left the country to seek work elsewhere.

People tend to spend more when they see a bright future. Italian confidence has steadily eroded over the past two decades, hurt by a revolving door of ineffectual governments. In Italy, as in Japan, the lack of economic growth has become chronic.


Underpinning economists’ worries is Italy’s biggest handicap: a huge national debt equal to 132 percent of national output and still growing.

Rising prices make it easier for high-debt countries like Italy to pay the fixed interest rates on their bonds. And debt is usually measured as a proportion of national output, so when output grows, debt shrinks. Because output is measured in money, rising prices –  inflation – boost output even if economic activity is stagnant, as in Italy. But if activity is stagnant and prices don’t rise, then the debt-to-output ratio will increase. That could potentially reignite the sort of investor panic that set off the euro zone debt and economic crisis four years ago.

Marcello Messori, economics professor at Rome’s LUISS university, estimates that without economic growth, prices in Italy would have to rise at least 3.2 percent a year for its debt to fall at the rate the European Union requires.

“I see an enormous danger that we will still be in this situation in six months’ time, and the longer it lasts the harder it is to get out,” says Gustavo Piga, an economics professor at Rome’s Tor Vergata University.

Sebastiano Salzone, a diminutive 33-year-old from the poor southern region of Calabria, left with his wife five years ago to run the historic Cafe Fiume on Via Salaria, a traditionally busy shopping street near the center of Rome.

Salzone was excited by the challenge. But after four years of grinding recession, his business is struggling to survive. “When I took over they warned me demand was weak and advised me not to raise prices. But now, I’m being forced to cut them,” he says.

A lunch at Cafe Fiume with a pasta course, mineral water, fruit and coffee costs 7 euros and 30 cents. That’s the same as it was eight years ago. In September, Salzone cut the price of his paninos by 40 cents to 2 euros 80, and cut the price he charges for soft drinks by 30 cents, to 2 euros. Despite the lower prices, sales have dropped 40 percent, or 500 euros a day, in the last three years. Salzone has reduced staff to 12 from 15 to break even.



Through the mid-1990s Italians saved a large proportion of their income by international standards. Savings became a buffer against the unpredictable economic effects of the political instability that has given Italy nearly one government a year since World War Two. Saving was also encouraged by the high interest rates on government bonds.

As growth has slowed and disposable income has fallen, however, people have set aside a smaller and smaller proportion of their salaries. The savings rate now stands at 8 percent, one third of its level in 1991. The average Italian had less spending power in 2013 at the end of each month than they did at the start of the century, according to Italian statistics institute Istat.

For hard-pressed individuals, low and falling prices can seem a godsend; but low prices lead to business closures, lower wages and job cuts – a lethal spiral. Since Italy entered recession in 2008 it has lost 15 percent of its manufacturing capacity and more than 80,000 shops and businesses. Those that remain are slashing prices in a battle to survive.

Home fixtures maker Iaquone is the kind of small, family-run company that is the backbone of Italy’s economy. The nine-person firm has been making doors, windows and blinds for the last 25 years in Frosinone, 90 km (56 miles) south of Rome.

But owner Benedetto Iaquone says people are now only changing their windows when they fall apart. To hold onto his 500,000 euros-a-year business, Iaquone says he is cutting prices. He has also changed suppliers, shaving the cost of buying glass and iron by 15 percent and 10 percent, respectively. By doing so, he is helping fuel the chain of deflation from consumers to other companies.

“Everyone’s profits are lower but at least we manage to keep working,” says the 45-year-old businessman. “I always tell myself that if we can get through this period we will come out very strong, but I’m honestly not optimistic about the future.”

In Italy’s largest supermarket chains, up to 40 percent of products are now sold below their recommended retail price, according to sector officials. “There is a constant erosion of our margins,” says Vege chief Santambrogio.


What Italy would look like after a decade of Japan-style deflation is grim to imagine. It is already among the world’s most sluggish economies, with youth unemployment at 43 percent.

As a member of a currency bloc, Rome’s options are limited. It can’t lower its domestic interest rate, nor devalue its currency. Officially, Italy’s budget has to follow European Union rules.

Lasting deflation would force more companies out of business, reduce already stagnant wages and raise unemployment further, economists say. The inevitable rise in its public debt could eventually lead to a default and a forced exit from the euro.

Opinions differ over how to head off the risk. Some economists say the European Central Bank should follow the example of the U.S. Federal Reserve and inject thousands of billions of euros into the euro zone economy by printing money to buy government bonds. ECB boss Draghi last week threw the door open to printing money, saying “excessively low” euro zone inflation had to be raised quickly by whatever means necessary.

Many in southern Europe say the EU should abandon its strict fiscal rules and invest heavily to create jobs. They also say Germany, the region’s strongest economy, should do more to push up its own wages and prices. Mediterranean countries need to price their products lower than Germany to make up for the fact that their goods – particularly engineered products such as cars – are less attractive. But with German inflation at a mere 0.5 percent, maintaining a decent price difference with Germany is forcing southern European countries into outright deflation.

Italy’s policymakers are trying to stop the drop. Prime Minister Matteo Renzi cut income tax in May by up to 80 euros a month for the country’s low earners. He is also offering workers the chance to dip early into a special fund that stores part of their wages until they leave their job.

But so far the emergency measures have had little effect – partly because Italians don’t really believe in them. A survey by the Euromedia agency showed that, despite the 80-euro cut, 63 percent of Italians actually think taxes will rise in the medium-term. Early evidence suggests most Italians are saving the extra money in their paychecks. If so, it will be reminiscent of similar attempts to boost demand in Japan in the late 1990s. The Japanese hoarded the windfalls offered by the government rather than spending them. 

Renato Gu, an energetic 31 year-old who came to Italy from China at the age of six, is closing down the small, mid-range women’s shoe and accessory shop he has run for the last four years in the heart of Rome because he can no longer cover his costs.

Gu says shops like his, catering to middle-class Italians, have been the ones most hit by the crisis, as once-faithful customers look elsewhere for cheaper and cheaper products. He says he has seen “no effect” on spending from the 80 euro tax cut. “I’ll consider any line of work,” says Gu, who is about to join the country’s 3.3. million unemployed. “But I’ve had enough of trying to run my own business.”

(Additional reporting by Giselda Vagnoni and Luca Trogni; Edited by Alessandra Galloni)

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