Italy can weather credit storm

Treasury constantly monitoring financial developments
(ANSA) - Rome, September 30 - Italian banks currently have enough cash on hand to allow the country to weather the international credit crisis, the Treasury said on Tuesday.
In a statement issued after a meeting of its special financial stability committee, the Treasury said ''the consequences (of the crisis) on Italy's banking system and insurance sector remain under control and the liquidity of Italian banks is adequate''.
The watchdog committee is chaired by Economy Minister Giulio Tremonti and includes Bank of Italy Governor Mario Draghi, Treasury Director Vittorio Grilli, the chairman of the insurance sector authority ISVAP, Giancarlo Giannini, and the head of the stock market authority Consob, Lamberto Cardia.
The committee, which has been meeting almost daily, said that while the repercussions of the crisis on Italy were contained, ''it is best to keep the situation under constant observation''.
Tremonti is set to report to the house on the credit crisis on Thursday morning. ITALIAN ECONOMY IS SOUND, FRATTINI SAYS.
Italy's condition to weather the financial crisis was also confirmed on Tuesday by Foreign Minister Franco Frattini. ''Fortunately, Italy has a sound financial setting. We do not have banks or insurance companies plagued by debt because we are a country which manufactures. Our industry protects us,'' Frattini said.
Some concern over the effects the US-based crisis will have on the Italian economy came from Fiat CEO Sergio Marchionne who said on Tuesday that the group's stock value and sales would suffer.
''For sure it (the credit crisis) will have an effect on us and right now no evaluations or forecasts can be relied upon,'' Marchionne said.
Nevertheless, he added that Fiat ''has a solid financial position which will allow us to cover our needs''.

ITALIAN ECONOMY STALLED

Revised Istat figures shows GDP down 0. 1% in 2nd qtr

(ANSA) - Rome, September 10 - The Italian economy is in worse shape than previously expected and could be headed for a recession if GDP does not pick up in the third quarter. National statistics bureau Istat on Wednesday revised its figures for the second quarter of 2008 and said GDP fell by 0.1% over the same period the previous year, its worse year-on-year result since the third quarter of 2003, when GDP also fell by 0.1%. Last month Istat had predicted zero growth for the second quarter. Istat confirmed that GDP sank by 0.3% over the first quarter of the year, its poorest performance since the last quarter of 2007. Italian Premier Silvio Berlusconi downplayed the bad economic news and said ''I believe that I am the premier of a very solid nation with a high standard of living and of well-being''. The poor state of the Italian economy was confirmed by the European Commission which on Wednesday reduced its already modest forecast for GDP growth in 2008 to 0.1%, from 0.5% calculated last April. The EC added that the reduction ''implies that there is no impetus for growth in 2009''. According to the European Union executive, the Italian economy has been slowing down since the middle of last year ''and the outlook for the coming months is not encouraging due to a further decline in competitiveness and a drop in global demand''. The EC said it expected Italy's GDP in the third quarter to be unchanged over the second quarter but that the economy should pick up slightly in the final quarter of 2008 with a predicted decline in inflation. According to the EC, the stagnation of the Italian economy is primarily due to a decline in domestic demand brought on by a surge in consumer prices. Should Italy's year-on-year GDP fall in the third quarter, this will mean that the economy is formally in a recession. The national retailers' association Confcommercio said that the revised Istat figures ''confirm the risk of a recession, something which is already a reality for consumers''. ''Consumer spending has been falling for the past three quarters and indications are that this will get even worse, also give the results of the past season for tourism.'' the group added. ''Unless measures are adopted to boost consumer spending by increasing available income for families, the current crisis will compromise the economic picture in 2009,'' Concommercio warned. Concern over the state of the economy was echoed by leading consumer groups who said the situation was ''grave and worrisome''. ''The violent plunge ion consumer spending, caused by purchasing power at historic lows, has resulted in consequences which are clear to everyone,'' Federconsumatori and Adusbef said in a joint statement. ''On one thing I think we can all agree on to try and avoid recession and that is the need for the European Central Bank to cut interest rates by at least one percentage point,'' they added.

The second browser war (From Economist.com)

Sep 3rd 2008 | SAN FRANCISCO

From Economist.com

Google’s new web browser is its most direct attack on Microsoft yet

SEVERAL years ago, Silicon Valley was rife with rumours that Google, then primarily a search engine, might be building a new web browser to rival that of Microsoft, called Internet Explorer (IE), or even an operating system to rival Microsoft’s Windows. Google mocked those rumours and they died down. But if Sergey Brin, Google’s co-founder, is to be believed, the speculation itself made him think that “maybe it’s not a bad idea”. And so this week Google did launch a new browser, called Chrome, that is also, in effect, a new operating system. The rumours, says Mr Brin cheekily, “just happened to migrate from being false to being true.”

Chrome amounts to a declaration of war—albeit a pre-emptive one, in Google’s mind—against Microsoft. So far, Google has been coy about admitting the rivalry (whereas Microsoft’s boss, Steve Ballmer, is obsessed with it). In web search and advertising, Google dominates roughly as Microsoft does in operating systems and office applications. To the extent that Google has challenged Microsoft’s core business at all, it is through its web-based word-processing, spreadsheet and presentation applications. But these, so far, have few users.

Google’s fear has been that Microsoft might use its grip on people’s computers and browsers to tweak the default settings so that Google’s search engine and other services might be disadvantaged. This, after all, is how Microsoft behaved in the 1990s, when it crushed Netscape, an early browser.

Microsoft’s fear, by contrast, has been that computing as a whole might move from the operating system as a platform for applications to the web (or “cloud”). This is why it attacked—also pre-emptively, in its mind—Netscape and landed in antitrust court.

As Google rose to dominate the web during this decade, it therefore invested a lot of energy into a rival web browser to IE, called Firefox. An open-source project (whose code can be altered by anybody), Firefox comes from a foundation, across the street from Google’s offices, that happens to be based on the remnants of the old Netscape. Google’s engineers contribute code to Firefox and pay the foundation a share of advertising when people search Google in the browser’s toolbar. Thus Firefox rose to become the largest browser after IE, with almost 20% of the market.

But Google concluded that even Firefox could not protect it against Microsoft. It began to define its business as “search, ads and apps”, where the apps (applications), with a few exceptions, run on the web and are accessed through a browser. So Google decided to build a browser from scratch, explicitly for those fledgling services, from word processing to snazzy virtual worlds.

Chrome, which it launched with a cheeky comic book instead of a press release, is the result. It is based on tabs, each of which runs independently of the others for security, speed and stability. It even works offline. It is, in short, the scenario that Microsoft has dreaded ever since Netscape. As Arnaud Weber, a Google engineer and one of the characters in the comic book, says in a speech bubble: “We’re applying the same kind of process isolation you find in modern operating systems.” It is a geek’s way of saying that developers and consumers may soon stop caring about the operating system on their own hard drive altogether.

Ingeniously, Chrome itself need not take a lot of market share to fulfil Google’s objectives. Google does not expect to sell or otherwise “monetise” Chrome directly. Like Firefox’s, Chrome’s source code is free for anybody to change and improve, and even for rival browser-makers to incorporate. That could even include Microsoft. As Mr Brin says, “we would consider it a success” if the next version of IE were “built on Chrome, or even if it were just a lot better as a result of Chrome.” Google wants ever more people doing ever more things on the web, and peace of mind that nobody, not even Microsoft, can interrupt that.