EVEN AS Italy’s parliament prepares to give its final approval today to the centre-right government’s austerity budget after weeks of tortuous changes, investors are considering what else Rome needs to do to halt a potentially mortal debt spiral.
Local media are dubbing a central part of the current plan “Britannia-2” – the sequel to a meeting hosted in June 1992 by UK institutional investors aboard Queen Elizabeth’s yacht, at which Mario Draghi, then a young head of Treasury and from this November the governor of the European Central Bank, presented Italy’s (and Europe’s) largest privatisation programme to date.
Finance minister Giulio Tremonti, is reported to be preparing to meet Italian and foreign investors, including representatives of sovereign wealth funds this month to discuss Italy’s next fire sale.
What is on offer has still to be determined. Officials have spoken of state-owned properties and utilities owned by local authorities – excluding water companies, which Italians decided in a referendum in June should stay under public control.
Sales of government-held stakes of more than 30 per cent in Enel, Italy’s largest power utility, and Eni, the oil and gas group, could raise more than €30 billion – but officials said this sensitive issue was unresolved.
Officials, who asked not to be identified, said several rounds of talks with China Investment Corp, China’s sovereign wealth fund, most recently in Rome last week, had shown China’s main interest to be Italy’s strategic assets rather than purchases of “significant” amounts of Italian debt, as sought by Mr Tremonti.
“They are interested in buying real stuff,” said one official. “This is completely different from their approach in the US which was to invest in treasuries.” – (Copyright The Financial Times Limited 2011)
