Geopolitics

Italian Businesses Slam 'Draconian' Coronavirus Controls

Entrepreneurs say ‘Basta’ to stop the ordinances they say risk paralyzing the economy.

Taking precautions in Milan
Taking precautions in Milan
Paolo Possamai

VENICE — Two days ago, a leading Italian industrialist circulated a photoshopped image of Da Vinci's Last Supper to his contacts via WhatsApp. All that was left of the iconic painting was the laid table — no trace of the apostles, let alone Christ. And the caption? "We're exaggerating here in Milan."

Every Italian businessperson with a budget to balance, from the region of Lombardy to Veneto, from major corporations to the local bar, feels the same way.

"We are in the presence of an authentic panic effect, generated by political communication and by ordinances perceived as excessive," says Agostino Bonomo, president of Confartigianato Veneto, the local branch of a national small business and craftsmen's association.

"I hope the decrees won't be upheld, there are thousands upon thousands of small businesses that live off their daily receipts to pay suppliers, employees, bills and mortgages," he adds. "There is a real danger of an extremely serious crisis, never before seen, caused by the collapse of internal consumption and exports. Paralysis of this country's economic life."

Antonio Santocono touches on the same themes in his analysis of the effects of the coronavirus ordinances. His experience, both as an entrepreneur (he is the founder of IT company Corvallis, which in 2018 boasted 160 million euros in revenue) and as the president of the Chamber of Commerce of the northern city of Padua, gives him a razor-sharp judgment on the issue.

"We are facing a very dramatic short-circuiting of the economy," Santocono says, "where a combination of the widespread panic among the people, which is understandable, and the folly of political measures that are completely out of proportion, can bring about an unprecedented crisis. We seem to be convinced that safeguarding the health of the populace can be achieved without destroying the economic fabric."

But what concrete effects can he see on his daily business activity? "What expression can I use, if not "folly", when the client companies of my consulting firm call to ask us not to send any technicians from Veneto?"

Empty tables in a Milan restaurant Xinhua/ZUMA Wire/ZUMA

Vincenzo Marinese, president of regional entrepreneurial association Confindustria Venezio e Rovigo, recounts a similar anecdote this week: a Croatian supplier was scheduled to deliver a load of quicklime to Marghera, near Venice, where one of Marinese's companies is headquartered, but refused to fill the order. The reason? If he did, he would be barred from re-entering Croatia upon return.

"We are dealing with a crazed communication strategy that risks fueling an unjustified panic and cost us tens of billions in damages," Marinese insists. "We need to be aware of the fact that exports are going to resume slowly, and that it will take a long time for the situation to return to normalcy."

Not to mention unbridled rage against whoever talks of "smart working" as though it were a cure-all: does it seem possible to keep the lathe running from your living room? They ask for help, information, and push for their interest groups to pound their fists on the desks of Prime Minister Giuseppe Conte and Veneto President Luca Zaia— politicians joined together for the first time in this collective "thumbs down."

And in its way, the request for permission to enact layoffs put forward by eyewear giants in the Belluno province of Veneto — Safilo, De Rigo, Marcolin — also reflects the Covid-19 wave.

The anger is mounting in factories and artisanal shops just as it is among baristas, restaurateurs, tobacconists, and shopkeepers.

We're risking catastrophe.

Patrizio Bertin, president of the representative group Confcommercio Veneto, attests to "enormous worry. We're risking catastrophe. The political communication has generated a sort of terroristic alarm. This is how the nation dies. I observe an anomalous disproportion between the risk of coronavirus and the certainty of the pandemic on the economy."

But what has happened in Bertin's businesses these past few days? "Yesterday we didn't even make enough money to cover the electricity for the day."

Indeed, tourism is the sector most profoundly rocked by the Covid-19 ordinances. "Tourism is founded upon trust. We have terrorized our clientele and blown up our reputation before the world's eyes," he concludes.

Marco Michelli, hotelier in the Venetian seaside resort of Bibione and national vice president of the Confturismo tourism industry association, signals that "a burst of cancellations on summer reservations are flooding in from Germany and Northern Europe, and we can already forget about Easter."

The city is now offering rooms at 30 to 40 euros per night and still reporting a 40% decline in reservations.

"We have implemented draconian measures and performed thousands upon thousands of tests— it's no wonder fewer cases are coming out of France and Germany, they're not looking for them!" exclaims Michelli. "We have to hope the decree won't be prolonged because it would be the kiss of death to the first touristic destination in Italy."

It's with a virtually unified voice that the plea rings out: Don't renew the ordinances!

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Economy

Air Next: How A Crypto Scam Collapsed On A Single Spelling Mistake

It is today a proven fraud, nailed by the French stock market watchdog: Air Next resorted to a full range of dubious practices to raise money for a blockchain-powered e-commerce app. But the simplest of errors exposed the scam and limited the damage to investors. A cautionary tale for the crypto economy.

Sky is the crypto limit

Laurence Boisseau

PARIS — Air Next promised to use blockchain technology to revolutionize passenger transport. Should we have read something into its name? In fact, the company was talking a lot of hot air from the start. Air Next turned out to be a scam, with a fake website, false identities, fake criminal records, counterfeited bank certificates, aggressive marketing … real crooks. Thirty-five employees recruited over the summer ranked among its victims, not to mention the few investors who put money in the business.

Maud (not her real name) had always dreamed of working in a start-up. In July, she spotted an ad on Linkedin and was interviewed by videoconference — hardly unusual in the era of COVID and teleworking. She was hired very quickly and signed a permanent work contract. She resigned from her old job, happy to get started on a new adventure.


Others like Maud fell for the bait. At least ten senior managers, coming from major airlines, airports, large French and American corporations, a former police officer … all firmly believed in this project. Some quit their jobs to join; some French expats even made their way back to France.

Share capital of one billion 

The story began last February, when Air Next registered with the Paris Commercial Court. The new company stated it was developing an application that would allow the purchase of airline tickets by using cryptocurrency, at unbeatable prices and with an automatic guarantee in case of cancellation or delay, via a "smart contract" system (a computer protocol that facilitates, verifies and oversees the handling of a contract).

The firm declared a share capital of one billion euros, with offices under construction at 50, Avenue des Champs Elysées, and a president, Philippe Vincent ... which was probably a usurped identity.

Last summer, Air Next started recruiting. The company also wanted to raise money to have the assets on hand to allow passenger compensation. It organized a fundraiser using an ICO, or "Initial Coin Offering", via the issuance of digital tokens, transacted in cryptocurrencies through the blockchain.

While nothing obliged him to do so, the company owner went as far as setting up a file with the AMF, France's stock market regulator which oversees this type of transaction. Seeking the market regulator stamp is optional, but when issued, it gives guarantees to those buying tokens.

screenshot of the typo that revealed the Air Next scam

The infamous typo that brought the Air Next scam down

compta online

Raising Initial Coin Offering 

Then, on Sept. 30, the AMF issued an alert, by way of a press release, on the risks of fraud associated with the ICO, as it suspected some documents to be forgeries. A few hours before that, Air Next had just brought forward by several days the date of its tokens pre-sale.

For employees of the new company, it was a brutal wake-up call. They quickly understood that they had been duped, that they'd bet on the proverbial house of cards. On the investor side, the CEO didn't get beyond an initial fundraising of 150,000 euros. He was hoping to raise millions, but despite his failure, he didn't lose confidence. Challenged by one of his employees on Telegram, he admitted that "many documents provided were false", that "an error cost the life of this project."

What was the "error" he was referring to? A typo in the name of the would-be bank backing the startup. A very small one, at the bottom of the page of the false bank certificate, where the name "Edmond de Rothschild" is misspelled "Edemond".

Finding culprits 

Before the AMF's public alert, websites specializing in crypto-assets had already noted certain inconsistencies. The company had declared a share capital of 1 billion euros, which is an enormous amount. Air Next's CEO also boasted about having discovered bitcoin at a time when only a few geeks knew about cryptocurrency.

Employees and investors filed a complaint. Failing to find the general manager, Julien Leclerc — which might also be a fake name — they started looking for other culprits. They believe that if the Paris Commercial Court hadn't registered the company, no one would have been defrauded.

Beyond the handful of victims, this case is a plea for the implementation of more secure procedures, in an increasingly digital world, particularly following the pandemic. The much touted ICO market is itself a victim, and may find it hard to recover.

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