Italy plans 21-billion euro asset sell-off to maintain debt in examine By Reuters

By Giuseppe Fonte

ROME (Reuters) – Italy goals to boost a minimum of 1% of gross home product (GDP), or roughly 21 billion euros ($22.2 billion), by way of asset gross sales between 2024 and 2026, the Treasury mentioned in its Financial and Monetary Doc (DEF) printed on Saturday.

The plan is a part of Prime Minister Giorgia Meloni’s efforts to maintain in examine the euro zone’s second-largest debt pile as a proportion of GDP, whereas traders hold a detailed eye on Rome’s creaking public funds.

Italy’s debt-to-GDP ratio is seen edging all the way down to 139.6% in 2026, from 140.2% this yr.

The brand new targets issue within the proceeds of asset disposals anticipated within the subsequent three years, the DEF mentioned, displaying that with out the sell-off plans the debt burden would most likely rise.

Financial system Minister Giancarlo Giorgetti mentioned within the doc that the stake gross sales would contain corporations which can be topic to privatisation commitments already agreed with the European Fee.

This can be a reference to financial institution Monte dei Paschi di Siena (MPS), which was bailed-out in 2017 at a value of 5.4 billion euros for taxpayers.

The Treasury is anticipated to rent advisers for the financial institution’s re-privatisation course of, bankers mentioned, although Giorgetti not too long ago poured chilly water on the prospect of fast motion by saying the federal government had no pressing want for money.

Italy may even promote shares in corporations by which the Treasury’s stake “exceeds that crucial to keep up an applicable coherence and unity of strategic path”, Giorgetti added, with out offering additional particulars.

Nevertheless, Italy’s governments have a report of missed privatisation targets relationship again to earlier than the COVID-19 pandemic, which triggered an extended spell of expansionary fiscal coverage that has not but ended.

In 2018, the then Prime Minister Giuseppe Conte pledged to boost some 18 billion euros from asset disposals by the top of the next yr to assist decrease the debt and reassure traders, however the plan produced no outcomes.

($1 = 0.9461 euros)