Italian political crisis has impact on many financial deals

Implications: After the resignation of PM Prodi, Italy will have to choose between a new government supported by the current Parliament or new elections. In either case there will be a major impact for relevant companies and deals, such as Alitalia-AirFrance, Telecom Italia, BPM, Banco Popolare, ENI, ENEL, Finmeccanica, Atlantia.

Analysis: On January 24, Italian PM Romano Prodi resigned. During next week we will know whether there will be a new government in Italy supported by the current Parliament - the most likely scenario - or whether there will be new national elections in April.

In both scenarios, the new government may decide to change PM Prodi's administration guidelines on a number of topics. Among the others:

Alitalia-AirFrance alliance. There may be a freezing of the negotiations (because of sensitive issues such as Malpensa airport, lay-offs) or even opening a new round of talks with the main rival AirOne, now teaming up with TPG.

Telecom Italia local network spin-off. Any decision has already be postponed to March, but it depends on the new government to bargain with the company on the perimeter of the network.

Privatizations (Fincantieri, Tirrenia). All the decisions will be taken by the new government, including Go/No Go on the privatization process (not started yet), choice between IPO or private placement, etc.

Reform of Popolari banks (BPM, Banco Popolare, etc.). The Senate has already requested the government to propose a bill for the reform of the voting system inside the Popolari banks.

CEOs of government-controlled companies (ENI, ENEL, Finmeccanica). All these companies will face EGMs in April, the new government will decide who are going to be the new chairmen, CEOs, directors.

Atlantia-Autostrade concession agreement. It will be up to the new government to persuade CIPE committee to accept the current draft of the concession agreement or whether to re-start negotiations with the company.