Italy plans 21-billion euro asset sell-off to keep debt in check -September 30, 2023 at 06:50 am EDT
ROME, Sept 30 (Reuters) – Italy aims to raise at least
1% of gross domestic product (GDP), or roughly 21 billion euros
($22.2 billion), through asset sales between 2024 and 2026, the
Treasury said in its Economic and Financial Document (DEF)
published on Saturday.
The plan is part of Prime Minister Giorgia Meloni’s efforts
to keep in check the euro zone’s second-largest debt pile as a
proportion of GDP, while investors keep a close eye on Rome’s
creaking public finances.
Italy’s debt-to-GDP ratio is seen edging down to 139.6% in
2026, from 140.2% this year.
The new targets factor in the proceeds of asset disposals
expected in the next three years, the DEF said, showing that
without the sell-off plans the debt burden would probably rise.
Economy Minister Giancarlo Giorgetti said in the document
that the stake sales would involve companies that are subject to
privatisation commitments already agreed with the European
Commission.
This is a reference to bank Monte dei Paschi di Siena (MPS)
, which was bailed-out in 2017 at a cost of 5.4 billion
euros for taxpayers.
The Treasury is expected to hire advisers for the bank’s
re-privatisation process, bankers said, though Giorgetti
recently poured cold water on the prospect of quick action by
saying the government had no urgent need for cash.
Italy will also sell shares in companies in which the
Treasury’s stake “exceeds that necessary to maintain an
appropriate coherence and unity of strategic direction”,
Giorgetti added, without providing further details.
However, Italy’s governments have a record of missed
privatisation targets dating back to before the COVID-19
pandemic, which triggered a long spell of expansionary fiscal
policy that has not yet ended.
In 2018, the then Prime Minister Giuseppe Conte pledged to
raise some 18 billion euros from asset disposals by the end of
the following year to help lower the debt and reassure
investors, but the plan produced no results.
($1 = 0.9461 euros)
(Reporting by Giuseppe Fonte
Editing by Helen Popper)
