Berlusconi: Italy in talks with foreign company to save Alitalia (updated)
Italian economy shrinking again
The Italian economy has suffered its second quarter of negative growth in the past nine months, raising the prospect of it going into recession.
Output shrank 0.3% in the second quarter, the weakest three-month performance for nearly five years, according to official figures. But Italy is not yet officially in recession as this requires there to be two consecutive negative quarters. Its economy grew 0.5% in the first quarter of 2008
ROME (AFP) - Italian Prime Minister Silvio Berlusconi said Thursday talks were being held with a "large foreign company" about forming an alliance with Alitalia to save the cash-strapped national airline from bankruptcy. "We're aiming for Italy to have a profit-making national carrier," Berlusconi told national news channel TG1."We have a plan, we have the shareholders, we have the necessary funds, we're talking to a large foreign company to form an alliance that would make a difference internationally," he said. The Italian government said late last month it had pulled together enough funds to rescue the airline, which has been surviving on a loan of 300 million euros (471 million dollars) made in late April from public funds after talks for an Air France-KLM takeover collapsed. State-controlled Alitalia employs 11,100 people in airline transportation while 8,300 work in maintenance for AZ Servizi, controlled by a public holding company. It recorded pre-tax losses of 215 million euros in the first quarter of this year.