Now is the time for anyone with cash to buy stocks and those who already own shares should hold on to them, Italian Premier Silvio Berlusconi said on Friday.
''We need to be stronger than panic and madness. Let them accuse me of being a salesman, but I feel it is my duty as premier to steer Italians away from panic and towards serenity,'' Berlusconi said at a press conference after a special cabinet meeting here.
''What is happening in other countries will probably affect us, too. A decline in demand in France and Germany will hurt our exports and we may not be immune to the repercussions this will have on the real economy. But from a financial point of view I don't see anything to be worried about,'' the premier said. Getting more into specifics, Berlusconi said now was the time to buy stock in the Italian energy giants ENI and ENEL ''because they are sure to recover in value''.
ENI and ENEL shares, he explained, ''are undervalued because these two companies continue to rack up profits. ENI, for example, will post an extraordinary profit this year''.
MILAN AND OTHER MARKETS CLOSE WEEK DOWN.
Average shares prices on the Milan stock exchange fell by over 21% this past week and those for Europe sank 22%, a weekly loss which was even worse than during the 1987 market crisis. Milan and other European markets opened sharply lower Friday and see-sawed throughout the day but without ever coming out of the red. The day ended with Milan's Mibtel index down 6.54% and the S&P/MIB index losing 7.14%. ENI lost 7.21% and ENEL fell 8.51%, while Fiat contained losses to 1.58% and UniCredit, which has been under pressure all week, plummeted 13.11%.
Last Friday the Mibtel closed with a gain of 1.82% and the S&P/MIB ended 2.59% higher. In one week the Mibtel lost 21.1% and the S&P/MIB dropped 21.6%. The Mibtel index measures all Italian and foreign shares listed in Milan, while the S&P/MIB index measures Milan's 40 most active shares and was created in 2004 to replace the Mib30 blue chip index. Elsewhere in Europe Frankfurt sank 7.01%, London closed Friday with a loss of 8.85% and Paris plummeted 7.73%. It was calculated that 396 million euros were lost on European markets on Friday. BERLUSCONI SEES NEED FOR GLOBAL SOLUTION.
Looking at the global credit crisis, the Italian premier said that small and medium-sized businesses ''are always the first to suffer'' and thus it was important to ''keep banks and their directors under constant pressure to be a little more courageous than usual'' by extending credit to business. According to Berlusconi, ''this is a new kind of crisis which can't be resolved using old methods. We must all coordinate measures which can give relief to a very dire situation''.
In Italy's case, the premier said ''we have a banking system which is the most sound in Europe and although our economy is not in a phase of great development, it is certainly not in recession''.
During the press conference Berlusconi said that ''European Union leaders may meet in Paris on Sunday'' for a review of the situation on international markets and also the Group of Eight (G8) most industrial countries ''may get together in the next few days''.
Among the responses the international community could adopt to deal with the global crisis is to temporarily suspend trading on all world markets, Berlusconi observed.
''There is talk of re-writing international financial rules, of a new Bretton Woods and of suspending markets to have time to write these new rules,'' the premier said.
''Of course, these are all hypotheses but one thing is clear: there must be a global solution''.
