ITALY

Introduction to ITALY

Italy, the third largest economy of the Eurozone, is progressively, although very slowly, recovering from the debt and financial crisis. The pace of the recovery has gained some momentum recently (0.9% in 2016, 1% in 2017 and 0.8% in 2018 according to OECD), benefiting from the growth-oriented measures adopted by the government (tax cuts, support to public investment, social contribution exemption to support employment growth etc.) and from the highly accommodating monetary policy stance followed by the ECB, which will further ease financial and monetary conditions. Some progresses are noticeable as unemployment (11% in July 2017). Modest growth should continue going forward.

The Italian productive sector is characterised by family companies, which are true flag bearers of Italian know-how, often grouped into "industrial districts". However, most Italian firms are small and suffer from weak productivity. Investment is structurally low and Italy's integration in global value chains remains limited.

As a result of these factors, the recovery path from the crisis is still long. Output is still below pre-crisis levels, while the Eurozone as a whole has now closed the gap (0.8% above). A decade after the crisis, real disposable income per capita remains below pre-euro accession levels. The crisis is not at the root of all the problems in the Italian economy, which is widely seen as a low-potential-growth economy with structural weaknesses. Several restrictions on both labour and production and the huge level of public debt are weighing on productivity, investment and activity growth. An imperfect match of the skills of the working population to market need and low R&D spending also penalise growth.

The government, however, has launched several structural and institutional reforms that aim to address these various weaknesses and boost output in the medium-to-longer term, but this process will take time to bear fruit. Against this background, public finances are recovering slowly. The country exited the European excessive deficit procedure early in 2012, but improvement has been limited since then, with fiscal deficit still at 2.4% of GDP in 2017. The public debt ratio is stabilising at just over the high level of 132% of GDP.

Summary

Italy is one of BNP Paribas' 'home' markets, with comprehensive capabilities for all customer segments. BNP Paribas is a leading player in corporate banking in Italy, and employs more than 70 people specifically dedicated to cash management services as well as a complete service offering in trade finance  across 17 business centres and 5 trade centres. Corporate customers include Italian companies of all sizes, together with Italian subsidiaries of foreign companies. These organisations are attracted to the bank's strong balance sheet, depth of domestic and international products and services, including proximity services across Italy, international footprint and commitment to service quality.

Italy is one of BNP Paribas' 'home' markets, with comprehensive capabilities for all customer segments. BNP Paribas is a leading player in corporate banking in Italy, and employs more than 70 people specifically dedicated to cash management services as well as a complete service offering in trade finance across 17 business centres and 5 trade centres. Corporate customers include Italian companies of all sizes, together with Italian subsidiaries of foreign companies. These organisations are attracted to the bank's strong balance sheet, depth of domestic and international products and services, including proximity services across Italy, international footprint and commitment to service quality.

Currency

  • Italy uses the euro (EUR).

Bank accounts

  • A company is generally considered resident in Italy if its place of effective management is located there.
Inside ItalyOutside Eurozone
Local Currency

Permitted without restriction, fully convertible.

Permitted without restriction, fully convertible.

Foreign Currency

Permitted without restriction, fully convertible.

Permitted without restriction, fully convertible.

Inside ItalyOutside Eurozone
Local Currency

Permitted without restriction, fully convertible.

Permitted without restriction, fully convertible.

Foreign Currency

Permitted without restriction, fully convertible.

  • Account opening and management is relatively straightforward in Italy, subject to standard know your customer (KYC) and compliance requirements. Please contact your BNP Paribas relationship manager for more information.

BNP Paribas Cash Management Capabilities

Payments & Collections

  • Credit transfers are used by companies to pay salaries and suppliers, and to make tax, benefit and treasury payments.
  • Low-value SEPA credit transfers (SCTs) can be settled via BI-COMP Rete Dettaglio, STEP2 or via correspondent banking networks. Participants in BI-COMP can clear payments bilaterally with participants in clearing systems in Austria (Clearing Service International for SCTs) and the Netherlands (equensWorldline Clearing and Settlement System for SEPA direct debits and SCTs).
  • Approximately 310 banks in Italy participate in the SEPA credit transfer scheme.
  • The niche paper-based MAV (Mediante Avviso– a paper-based giro issued by the creditor's bank) and Freccia (Bollettino Bancario – a paper-based giro issued by the creditor) remain outside of the scope of SEPA and are not affected by the SEPA end date regulation.
  • High-value and urgent domestic and cross-border (within the euro zone) credit transfers can be settled in real time via TARGET2-BI.
  • High-value and urgent cross-border payments can also be settled via the Euro Banking Association’s EURO1 system. Thirteen banks in Italy participate directly in EURO1.
  • Cross-border transfers can be made via SWIFT and settled through correspondent banks abroad.
  • In November 2017, the European Payment Council’s SCTInt scheme (a pan-European 24/7 instant payment scheme for SEPA credit transfers) went live across all SEPA countries. The scheme enables the transfer of funds (the maximum threshold value for SCTInsts will be EUR 15,000) to another account in less than ten seconds. Participation in the European Payment Council’s SCT Inst scheme is optional. The service has been available in Italy since November 2017.
  • EBA Clearing and Italy’s SIA Group have developed and implemented a pan-European platform for instant EUR payments called RT1. The new system went live on the launch date of SCT Insts in November 2017. It is fully compliant with the SCT Insts scheme and is in line with the ISO 20022 global messaging standards for instant payments. RT1 was launched in Italy in November 2017.
  • Direct debits are used for low-value, regular payments, such as utility bills.
  • Direct debits can be settled via BI-COMP Rete Dettaglio or, in the case of SEPA direct debits, by STEP2.
  • The RIBA (Ricevuta Bancaria), a non-preauthorised direct debit, remains outside of the scope of SEPA migration and is not affected by the SEPA end date regulation.

Electronic banking

Liquidity management

  • Domestic notional cash pooling is available in Italy but not widely practiced because of the restrictions on banks offsetting debit and credit balances.
  • Domestic cash concentration structures are widely available.
  • Resident and non-resident bank accounts can participate in the same cash concentration structure, as can different legal entities.
  • Zero balancing is the most commonly used structure.
  • Multi-bank cash concentration is offered by some Italian banks.
  • Cross-border notional cash pools are not usually based in Italy because of the restrictions on banks offsetting credit and debit balances.

  • Cross-border cash concentration structures are not normally based in Italy.

  • Residents in Italy are able to sweep cash from their resident bank accounts into non-resident accounts on a daily or weekly basis.

  • Italian resident entities are also permitted to participate in cash concentration structures where the header account is located outside Italy.

Short term investments

BNP Paribas Trade Finance Capabilities

International trade

  • As a member of the EU, Italy follows the EU customs code and applies all associated regulations and commercial policies.
  • Trade with other countries in the European Economic Area (EEA) and Switzerland is exempt from tariffs and other controls.

Imports

Engineering products

 

Chemicals

Transport equipment

Energy products

Minerals and non-ferrous metals

Textiles and clothing

Food

Beverages

Tobacco

 

Primary Import sources

Germany (16.3%)

France (8.9%)

China (7.5%)

Netherlands (5.5%)

Spain (5.3%)

Belgium (4.9%)

 

 

 

 

Exports

Engineering products

Textiles and clothing

Production machinery

Motor vehicles

Transport equipment

Chemicals

Food

Beverages

Tobacco

Minerals and non-ferrous metals

Export markets

Germany (12.6%)

France (10.5%)

USA (8.9%)

UK (5.4%)

 Spain (5%)

Switzerland (4.6%)

 

 

 

 

 

 

2013

2014

2015

2016

2017

Exports

- goods      USD m

503,486

517,128

450,174

453,614

496,282

 

- services  USD m

111,988

113,987

98,278

100,840

110,985

Imports

- goods      USD m

455,485

454,602

393,595

389,794

432,977

 

- services  USD m

111,442

115,337

101,205

103,958

115,229

Current account as % GDP      

+ 0.9

+ 1.8

+ 1.5

+ 2.6

+ 2.8

Source: IMF, International Financial Statistics, July 2018.

Regulatory requirements

Market data updated as of 01-08-2017