adminItalian Prime Minister Mario Monti, who has been struggling to allay fears over Italy’s vast debt said the measures were “very robust” and included a new fund which will draw together financial aid packages for businesses.
The government said its first step in reducing its debt would be to raise around 10 billion euros (US$12,6 billion) by selling off three companies held by the economy ministry — with other privatisations to follow.
Fintecna, a holding company which controls the Fincantieri shipyards, credit insurers Sace, and Simsest, which provides services to Italian companies oversees, will be sold to a state-controlled holding company, it said.
Deputy Economy Minister Vittorio Grillo said the returns may be used to pay the government’s bills as well as buying back sovereign bonds, adding that the first part of the sale should be completed by the end of the month.
The government will also sell off unused property after military downsising. It will set up a real estate fund into which such property will be placed to be “valued and sold” to private investors.
Among other measures, the government will raise tax deductions on renovation works to help the struggling building trade, provide tax credits to help qualified young people get a job and create positions in the green economy. Economic development minister Corrado Passera said the fund “for sustainable growth” would have a budget of two billion euros.
The government said it will also cut staff numbers and merge some departments in an attempt to streamline. Plans are to reduce through attrition the staff in the prime minister’s office and finance ministry by 10 percent. Il Sole 24 Ore newspaper had anticipated the government’s announcement last Friday, saying the country would raise at least 30 billion euros through privatisations by the end of the year as it rushed to fend off the debt crisis.
Italy suffered two painful bond auctions this week and there is anxiety on the markets that it may be hit by contagion from other struggling countries. Prime Minister Mario Monti was quick to back the plan to raise capital by selling off public assets, from buildings to public services, when he came to power at the end of 2011 as the economic crisis enveloped Italy.
The previous government, led by Silvio Berlusconi, got the ball rolling by inviting international investors to Rome at the end of September.
Italy is struggling with a public debt equal to around 120 percent of its gross domestic product, one of the highest levels in the 17-nation eurozone.
Figures released by the Bank of Italy last week showed it reached a new record high in April at 1 949 trillion euros compared to 1 946 trillion in March. — AFP.
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