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Italian quakes rock wealthy region, national economy

By Reuters 29 May 2012

The second powerful earthquake to hit Italy in little over a week has carved a swathe of destruction across one of the country's richest and most productive regions and given a fresh headache to an economy already deep in recession. By Steve Scherer 

Emilia Romagna, the northern region hit by the quake, is home to some of Italy’s best-known brands, including the world’s biggest pasta maker Barilla, high-performance Ferrari sports cars, and motorcycle maker Ducati Motor Holding.

It is also home to some of the country’s most productive farmland and produces valuable food exports including Parma ham and Parmesan cheese.

Of Italy’s 20 regions, Emilia-Romagna has the fourth-biggest gross domestic product, more than 135 billion euros in real terms in 2009, according to the latest Eurostat data.

Its importance was underlined by Prime Minister Mario Monti, who promised swift aid to get the region going again.

“The state will do all that it must do… as fast as it can to guarantee the return to normality in a region so special, so important, so productive for Italy,” Monti told a hastily called news conference.

The quakes are yet another setback for an economy already hobbled by rising unemployment, a severe recession and the weight of tough austerity measures taken by Monti to stave off a Greek-style default.

Italy has had the slowest-growing economy in the European Union for a decade, and the Organisation for Economic Cooperation and Development warned last week that its growth prospects in the period to 2017 were worse than those of any other advanced country it surveyed.

Though the extent of damage and the number of dead were still being assessed, several of those killed in the two quakes were blue-collar workers inside factories or warehouses that collapsed on top of them.

“Fear will paralyse Emilia now,” wrote the northern La Stampa newspaper’s editor-in-chief Mario Calabresi on Twitter. “Who’s going to be willing to go back to work in a big warehouse now?” he asked.

Tuesday’s quake comes just a few days after the first earthquake caused an estimated 200 million euros in damage to the region’s rich agricultural land.

Barilla, based in Parma, said Monday’s quake had had no effect on production. The pasta-making plant was evacuated for 15 minutes, but the production lines kept going, a spokesman for the privately owned company said.

Ferrari suspended activities at its Formula One factory in Maranello so that workers could join their families, but there was no damage to any of the facilities, a spokesman said. Ferrari is owned by Italy’s biggest car maker Fiat.

Ducati, based in Borgo Panigale near Bologna, said the factory was closed because of the tremor but no damage had yet been verified, according to the company’s Twitter account. Volkswagen’s Audi division agreed last month to buy Ducati from private equity-owned Investindustrial.

The earthquakes, magnitude 6.0 and 5.8 respectively, also come at a difficult time for Italy, which is still mired in the euro zone debt crisis.

The nation’s 10-year-benchmark bond yields hovered just below 6 percent on Tuesday, and an auction showed six-month borrowing costs rising.

While the quakes are likely to have a national economic impact, they are also a blow to Italy’s cultural heritage because Emilia-Romagna is rich in art and architecture.

Italian media reported serious damage to the Baroque cathedral in Carpi, and the Te palace in Mantua, an architectural masterpiece of the late Renaissance filled with works of art, and the dome of St. Barbara’s Basilica in Mantua was reported to have collapsed.

The May 20 tremor had already caused the greatest damage to the country’s architectural and artistic heritage since a 1997 quake caused parts of the ceiling of the Basilica of St. Francis in Assisi to collapse. DM

 

Photo: A view of Delle Rocche castle, damaged after an earthquake in Finale Emilia May 20, 2012. REUTERS/Paolo Bona

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