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Vatican criminal trial to shed light on failed Carige bank takeover

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Cardinal Angelo Becciu speaks to the media a day near the Vatican, in Rome, Italy, September 25, 2020. REUTERS/Guglielmo Mangiapane/File Photo

The thwarted takeover of a troubled Italian bank in 2018 will come into focus in a forthcoming Vatican trial that is tied to Pope Francis's efforts to clean up Holy See finances after decades of scandals, writes Giselda Vagnoni.

Weakened by mismanagement and bad loans, Carige bank was placed under special administration by the European Central Bank in early 2019 after a failed attempt led by one of its main shareholders, Raffaele Mincione, to take control.

Vatican prosecutors allege that Mincione bought a stake in Carige with embezzled money including funds raised from faithful Catholics and intended for the needy.

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They have indicted him and another nine people including a prominent Cardinal Angelo Becciu over a multi-million-euro scandal that also involves the Vatican's purchase of a building in one of London's smartest districts.

The trial is due to begin on 27 July. The defendants are all free pending the opening of the case. Read more.

Mincione, who lives in London, has consistently denied wrongdoing. His Italian lawyer Luigi Giuliano declined to comment, saying "he wants to prepare the defence arguments in the utmost confidentiality" ahead of the trial.

The former Carige shareholder resigned from the lender's board in September 2018. Two months later, Mincione sold the London property to the Vatican in a deal negotiated by another Italian middleman, Gianluigi Torzi, who also faces trial.

Torzi has denied any wrongdoing, as has Becciu.

Prosecutors believe the Vatican paid over 350 million euros ($410 million) for the building, including debt, which had been acquired by Mincione for 129 million pounds ($177.66 million) just a few years before.

As evidence of alleged criminal intent, prosecutors say Mincione used part of 40 million pounds of Vatican money to repay a loan from Torzi for the failed bid to take control of Carige’s board.

"Until now, the sources available for public consultation have never hinted that Mincione had financed the takeover of Carige with funds from the (Catholic Church)," prosecutors said in their 487-page charge sheet released earlier this month.

The two brokers are accused of embezzlement, fraud and money laundering. Torzi is also charged with extortion.

Both men have said the sale of the London building was unconnected to the loan for Carige.

Torzi's lawyer Ambra Giovene told Reuters prosecutors had yet to prove that part of the 40-million-pound loan was transferred by Mincione to her client, and stressed there was no link between the two deals.

Carige declined to comment.

($1 = 0.7261 pounds)

Italy

Italy arrests 18 for illegal fishing of protected shellfish

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A general view of underwater damaged rocks after scuba divers used hammers to illegally harvest date mussels at Tyrrhenian Sea as seen in this screengrab taken from a video released on July 28, 2021. Italian Coast Guard/Handout via REUTERS
A view of the Faraglioni giant rocks off the coast of Capri, where the surrounding seabed has been devastated by illegal fishing of valuable shellfish known as date mussels, in Capri, Italy, April 28, 2021. REUTERS/Yara Nardi/File Photo

The Italian coastguard arrested 18 people on Wednesday (28 July) for illegal fishing of a rare mollusc, breaking up what police said was a criminal organisation that had been destroying a stretch of protected coastline south of Naples, writes Gavin Jones, Reuters.

The arrests followed a three-year investigation into the group which had allegedly been harvesting date mussels, a protected species, using hammers to get them out of the rocks near the seaside beauty spot of Sorrento.

Fishing for date mussels has been illegal in Italy since 1998, because they are an endangered species and the invasive methods used to get them out of the rocks they bore into are destructive for the marine ecosystem.

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The valuable shellfish, considered a delicacy, are longer than common mussels and have a browner shell. They sell at up to 200 euros ($235) per kilo on the black market.

The people arrested are accused of numerous crimes including illegal fishing, destroying the marine habitat and selling unsafe foods, said a statement from the prosecutors' office of Torre Annunziata which led the investigation.

The "criminal organisation," which had allegedly operated since 2016, was also responsible for collecting and selling clams from a "highly polluted" area near the mouth of a river carrying hydrocarbons and heavy metals, the statement said.

Less than three months ago on the nearby island of Capri, a glamorous tourist destination, police broke up two other organisations for date mussel fishing. read more

A police video showed the holes in the three "Faraglioni" rock formations, a symbol of Capri, caused by the drills and hammers the fishermen had used to extract the molluscs.

($1 = €0.8471)

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coronavirus

COVID-19 crisis has led to food crisis, says Italy's Draghi

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Italian Prime Minister Mario Draghi arrives for the virtual G20 summit on the global health crisis, at Villa Pamphilj in Rome, Italy, May 21, 2021. REUTERS/Yara Nardi

The world must ensure access to food supplies as forcefully as it moved to ensure access to vaccines, Italian Prime Minister Mario Draghi said at the opening of the United Nations Food Systems Pre-Summit in Rome, writes Maytaal Angel.

"The health crisis (COVID-19) has led to a food crisis," he said, citing data showing malnutrition in all its forms has become the leading cause of ill health and death in the world.

The U.N.'s first ever Food Systems Summit will take place in September, with the aim of delivering progress on the body's 2030 sustainable development goals (SDGs).

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According to the latest U.N. data, the world's food system, which involves cutting down forests to plant crops, is responsible for a third of global greenhouse gas emissions, making it a leading cause of climate change.

"We are off track to achieve the SDGs," said U.N. Secretary General António Guterres, who first announced his plan to convene the Food Systems Summit in October 2019, before COVID-19 dramatically slowed progress towards SDGs like zero hunger.

After remaining virtually unchanged for five years, world hunger and malnutrition rose last year by around 118 million people to 768 million, with most of the increase likely due to the COVID-19 pandemic, according to a major U.N. report. Read more.

On internationally traded markets, world food prices were up 33.9% year-on-year in June, according to the U.N food agency's price index, which measures a basket of cereals, oilseeds, dairy products, meat and sugar. Read more.

There is increased diplomatic momentum to tackle hunger, malnutrition and the climate crisis this year with summits like the current one, but the challenge is huge.

Guterres said the pre-summit will assess progress towards achieving the SDGs by transforming global food systems, which, he noted, are also responsible for 80% of the world's biodiversity loss.Reporting by Maytaal Angel

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Aviation/airlines

Commission approves €800 million Italian scheme to compensate airports and ground-handling operators for the damage suffered due to the coronavirus outbreak

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The European Commission has approved, under EU state aid rules, an €800 million Italian scheme to compensate airports and ground-handling operators for the damage suffered due to the coronavirus outbreak and the travel restrictions that Italy and other countries had to implement to limit the spread of the virus.

Executive Vice President Margrethe Vestager in charge of competition policy said: "Airports are among the companies that have been hit particularly hard by the coronavirus outbreak. This €800 million scheme will enable Italy to compensate them for the damage suffered as a direct result of the travel restrictions that Italy and other countries had to implement to limit the spread of the virus. We continue working in close cooperation with member states to find workable solutions to mitigate the economic impact of the coronavirus outbreak, in line with EU rules.”

The Italian scheme

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Italy notified to the Commission an aid measure to compensate airports and ground-handling operators for the damage suffered during the period between 1 March and 14 July 2020 due to the coronavirus outbreak and the travel restrictions in place.

Under the scheme, the aid will take the form of direct grants. The measure will be open to all airports and ground-handling operators with a valid operating certificate delivered by the Italian civil aviation authority.

A claw-back mechanism will ensure that any public support received by the beneficiaries in excess to the actual damage suffered will have to be paid back to the Italian State.  

The Commission assessed the measure under Article 107(2)(b) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve State aid measures granted by member states to compensate specific companies or specific sectors for the damages directly caused by exceptional occurrences, such as the coronavirus outbreak.

The Commission considers that the coronavirus outbreak qualifies as an exceptional occurrence, as it is an extraordinary, unforeseeable event having a significant economic impact. As a result, exceptional interventions by the member states to compensate for the damages linked to the outbreak are justified. 

The Commission found that the Italian measure will compensate damages that are directly linked to the coronavirus outbreak, and that it is proportionate, as the compensation will not exceed what is necessary to make good the damage, in line with Article 107(2)(b) TFEU.

On this basis, the Commission approved the measure under EU state aid rules.

Background

Financial support from EU or national funds granted to health services or other public services to tackle the coronavirus situation falls outside the scope of State aid control. The same applies to any public financial support given directly to citizens. Similarly, public support measures that are available to all companies such as for example wage subsidies and suspension of payments of corporate and value added taxes or social contributions do not fall under State aid control and do not require the Commission's approval under EU State aid rules. In all these cases, member states can act immediately.

When State aid rules are applicable, member states can design ample aid measures to support specific companies or sectors suffering from the consequences of the coronavirus outbreak in line with the existing EU State aid framework.

On 13 March 2020, the Commission adopted a Communication on a co-ordinated economic response to the COVID-19 outbreak setting out these possibilities.

In this respect, for example:

  • Member states can compensate specific companies or specific sectors (in the form of schemes) for the damage suffered due and directly caused by exceptional occurrences, such as those caused by the coronavirus outbreak. This is foreseen by Article 107(2)(b)TFEU.
  • State aid rules based on Article 107(3)(c) TFEU enable member states to help companies cope with liquidity shortages and needing urgent rescue aid.
  • This can be complemented by a variety of additional measures, such as under the de minimis Regulation and the General Block Exemption Regulation, which can also be put in place by Member States immediately, without involvement of the Commission.

In case of particularly severe economic situations, such as the one currently faced by all member states due the coronavirus outbreak, EU State aid rules allow member states to grant support to remedy a serious disturbance to their economy. This is foreseen by Article 107(3)(b) TFEU of the Treaty on the Functioning of the European Union.

On 19 March 2020, the Commission adopted a State Aid Temporary Framework based on Article 107(3)(b) TFEU to enable Member States to use the full flexibility foreseen under State aid rules to support the economy in the context of the coronavirus outbreak. The Temporary Framework, as amended on 3 April, 8 May, 29 June, 13 October 2020 and 28 January 2021, provides for the following types of aid, which can be granted by member states: (i) Direct grants, equity injections, selective tax advantages and advance payments; (ii) State guarantees for loans taken by companies; (iii) Subsidised public loans to companies, including subordinated loans; (iv) Safeguards for banks that channel State aid to the real economy; (v) Public short-term export credit insurance;(vi) Support for coronavirus related research and development (R&D); (vii) Support for the construction and upscaling of testing facilities; (viii) Support for the production of products relevant to tackle the coronavirus outbreak; (ix) Targeted support in the form of deferral of tax payments and/or suspensions of social security contributions; (x) Targeted support in the form of wage subsidies for employees; (xi) Targeted support in the form of equity and/or hybrid capital instruments; (xii) Support for uncovered fixed costs for companies facing a decline in turnover in the context of the coronavirus outbreak.

The Temporary Framework will be in place until the end of December 2021. With a view to ensuring legal certainty, the Commission will assess before this date if it needs to be extended.

The non-confidential version of the decision will be made available under the case number SA.63074 in the state aid register on the Commission's competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.

More information on the Temporary Framework and other action the Commission has taken to address the economic impact of the coronavirus pandemic can be found here.

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