Italy pledges privatisations to show European Commission it can cut debt

Italy will sell stakes in public entities including oil and gas company Eni to raise up to €12 billion next year and help cut public debt, prime minister Enrico Letta has said.

Holdings to be sold include STMicroelectronics, shipbuilder Fincantieri, air traffic controller Enav and 3 per cent of Eni, although Italy will keep its overall stake in the energy company above 30 per cent, Mr Letta said.

Mr Letti told reporters yesterday that half of the amount raised would be used to reduce Italy's debt in 2014. He hoped this would help win more leeway from the European Commission on investments.

This is “a first step to not just to keep the 2014 deficit under control, but also to reduce total public debt for the first time in five years”, he added.

Italy's public debt of about 133 per cent of GDP is the second highest in the euro zone after Greece. The €6 billion from the privatisations earmarked for debt reduction is equal to about 0.3 per cent of GDP. Italy has been promising to launch a programme of privatisations and other asset sales for several years, but successive governments failed to get it off the ground. – (Reuters)