Italy plans to undertake US$22bil asset sell-off

ROME: Italy aims to raise at least 1% of gross domestic product (GDP), or roughly €21bil (US$22.2bil), through asset sales between 2024 and 2026, the Treasury says in its Economic and Financial Document (DEF).

The plan is part of Prime Minister Giorgia Meloni’s efforts to keep in check the eurozone’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 €5.4bil 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 €18bil from asset disposals by the end of the following year to help lower the debt and reassure investors, but the plan produced no results. — Reuters