Connect to share and comment
Italy will sell stakes in eight companies including energy giant Eni in a "first packet of privatisations" expected to raise up to 12 billion euros ($16.1 billion), Prime Minister Enrico Letta said on Thursday.
The sales are "a first move towards not just keeping the 2014 deficit under control" but also towards cutting Italy's vast public debt "for the first time in five years", Letta said following a cabinet meeting.
The state plans to sell up to 3.0 percent of its stake in Eni, worth two billion euros, while keeping at least 30 percent of the company.
Other companies involved in the privatisation drive include shipbuilder Fincantieri, STMicroelectronics and Grandi Stazioni, a member of Italy's railways group, Letta said at a press conference.
The government will cede 60 percent of its stake in export credit agency Sace and Grandi Stazioni, and 40 percent of Fincantieri and air traffic controller Enav.
Half of the amount raised will go into debt reduction -- key to "convincing the European Commission to provide extra margins of flexibility for 2014" in terms of investments, Letta said.
Italy's public debt currently stands at around 134 percent of gross domestic product (GDP).
The eurozone's third biggest economy has pledged several times over the past few years to follow through on selling state assets but this is its first concrete commitment.
Letta said the government intends to launch a second round of sales "in the next few months".
Last week the European Union issued stern warnings to Italy, France and Spain that they must hold unwaveringly to their budgets for 2014 or run afoul of the bloc's fiscal rules.
EU Economy and Euro Commissioner Olli Rehn warned that Italy's debt could get worse, and denied the country the right to class some spending as a special exemption for growth-enhancing investment.
He said Italy's economy was made more fragile by a lingering fear of a return to political turmoil in the coalition-led country, but Letta said Brussels was unjustly putting pressure on austerity-hit countries.
Letta insisted that "the fiscal consolidation path is for us a mantra, a duty."
He also restated the government's forecast that the economy will end its longest post-war recession in the last quarter of this year, but warned recovery would be weak.
In the third quarter of 2013, the economy contracted by 0.1 percent -- the ninth quarterly shrinkage in a row.