(Bloomberg) -- Italian Finance Minister Roberto Gualtieri dismissed the last government's plan to sell state assets equal to about 1% of gross domestic product in 2019 as “very unrealistic.”
The previous administration had pledged privatizations of about 18 billion euros ($20 billion) as part of a deal with the European Union to avoid sanctions over excessive debt. While the target always seemed optimistic, Gualtieri said the focus now will shift to making assets owned by the state more efficient.
“I don't think privatizations are a tool to generate cash, and to occasionally draw resources from just to square the budget,” he said in a press conference Saturday in Helsinki, where he attended his first meeting of European finance ministers after being appointed. “Italy has very efficient companies, large publicly owned companies which are strategic and efficient, that pay dividends to the state rather being a cost for it.”
Prime Minister Giuseppe Conte's new government has been welcomed favorably by markets after striking a distinctly more pro-European tone in comparison to the previous populist administration, which was also led by Conte.
But the pressure is now on drafting a 2020 budget that avoids an automatic sales tax increase worth 23 billion euros, keeps promises of introducing a minimum wage and at the same time reducing Italy's huge public debt.
“A country like Italy should put debt on a downward trajectory,” Gualtieri said. “This must happen through several factors: support for growth, strengthening the credibility in the country, which brings a reduction of the debt cost, and public finance balance.”
Gualtieri dismissed reports in the Italian media of a government plan to raise as much as 6 billion euros from asset sales this year as part of its strategy to cut the country's debt. The plan reportedly included transferring to state lender Cassa Depositi e Prestiti SpA some of its stakes in Eni SpA, Poste SpA, STM and Enav SpA.
To contact the reporter on this story: Alessandro Speciale in Rome at aspeciale@bloomberg.net
To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Sara Marley, Andrew Langley
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