Alitalia - the end?

I mentioned on 17th March that the deal between Air France-KLM and Alitalia seemed far from a sure thing and now it seems to have got seriously iffy. Silvio Berlusconi has said he would not support the deal – that is presumably to say that he would not agree to sell the government stake in the airline – and it looks as if he will be Prime Minister within a fortnight. Naturally the purchasers want a little more security than this but it is in part their fault for being so slow. Now the unions have refused to accept the 2,100 redundancies proposed by Air France and the French have pulled out of talks, leaving their offer on the table. The airline has run out of money; it must find a buyer, which would trigger a state funded bridging loan, or go into administration, within days.

This is a country where last minute surprises often emerge from the hat, and Europe has no more skilled prestidigitator than Silvio Berlusconi, but it does seem as if a bitter awakening is taking place here in Italy, this following the news that Spain has overtaken it in GDP per head, the Neapolitan rubbish and mozzarella scandals and so on. On this issue Italy should be pragmatic: if the people wake up one morning to find there is no national airline it will be a blow to their pride, but one that is easily overcome. Life will go on.

The next government must seek to manage expectations, however, because there will be more surprises like this one. I was disappointed to hear some of the rash, unaffordable promises made in the election campaign. Caution is needed right now, not brash posturing. Rude awakenings, if they happen at all, should happen gradually.