Italy minister points to sale of stakes in railways, motorways

By Giuseppe Fonte

ROME (Reuters) – Italian Economy Minister Giancarlo Giorgetti suggested on Tuesday that the government intends to sell stakes in the state-owned railways and motorway network.

Giorgetti was asked by reporters in parliament if Rome’s plan announced last month to raise 1% of gross domestic product (GDP), or 21 billion euros ($22.24 billion), from state sell-offs over the next three years would include privatising the motorways, highway maintenance and railways.

“Flipping around the order might give you the right idea,” he replied, suggesting that stakes in these companies would be put on the block, but not in the same chronological order as listed in the question.

Earlier, addressing parliament on the Treasury’s latest budget framework, Giorgetti said state sell-offs would be managed in line with Italy’s strategic interests.

The privatisation plan is part of Prime Minister Giorgia Meloni’s efforts to keep in check Italy’s huge debt pile, proportionally the second largest in the euro zone, while investors keep a close eye on Rome’s creaking public finances.

However, Italian governments have a long record of missed privatisation targets from before the COVID-19 pandemic, which triggered a period of expansionary fiscal policy that has not yet ended.

The Bank of Italy on Monday highlighted that, over the past decade, proceeds from privatisation programmes have averaged less than 0.1% of national output per year.

The country’s audit court expressed more explicit scepticism, saying the latest sell-off plan could amount to no more than “substantial window dressing”, aimed at painting a more promising budget picture.

In its latest economic planning document published last month, the Treasury said it aimed to sell shares in companies in which the state’s stake exceeded what was needed to maintain “appropriate coherence and unity of strategic direction.”

At the top of the list of sell-off targets is bailed-out bank Monte dei Paschi di Siena (MPS).

Commitments agreed with European Union authorities at the time of MPS’s 5.4-billion-euro bailout in 2017 bind Rome to eventually selling its 64% stake in the bank.

($1 = 0.9441 euros)

(Reporting by Giuseppe Fonte, editing by Gavin Jones)