"The increased political uncertainty and non-conducive backdrop for further structural reform measures constitute a further adverse shock to the real economy amidst the deep recession," the agency said. The latest economic data underscored that the recession in Italy is "one of the deepest in Europe," according to Fitch. Related: Eurozone economy to shrink again in 2013.
BP Expects to Pay More Over Deepwater
PLC expects to pay more than previously anticipated in compensation for private economic and property damage stemming from the Deepwater Horizon disaster in the Gulf of Mexico, according to the company's annual report.
Average payments for business economic losses so far have been higher than anticipated, the company said. This means BP can no longer give a reliable estimate for the total cost of the settlement it agreed on last year with the plaintiffs' steering committee—a group representing individuals with economic, property or medical damage claims—other than to say it will be significantly higher than $7.7 billion.
BP has already spent over $24 billion in cleanup and restoration costs and payments on claims made by individuals, businesses and governments related to Deepwater Horizon, BP Chief Executive Bob Dudley said this week. This latest increase in the cost of the disaster, which killed 11 men and triggered the worst offshore oil spill in U.S. history, comes as the company is embroiled in a civil trial could bring additional fines totaling as much as $17.6 billion.
BP has spent or provisioned more than $40 billion in total for the disaster, Mr. Dudley said.
BP said the cost of the plaintiffs' steering committee settlement had been higher than expected because the administrator of the compensation fund was using a more generous interpretation of the payout agreement than BP had assumed initially.
In February, BP said it expected the settlement to cost $8.5 billion—already an increase from the original estimated cost of $7.8 billion last year—but it has now withdrawn that guidance.
The company said it would issue fresh guidance for the higher costs as soon as it is able, but that it was currently not possible to produce a reliable estimate.
The final cost is likely to be higher than $7.7 billion, which is BP's estimate of other payments to be made under the plaintiffs' steering committee settlement, excluding the future claims for business economic loss, whose size cannot now be determined because the size of the payouts are subject to a legal dispute.