Giorgia Meloni's unclear privatization plans pose major challenges for financial experts.

Giorgia Meloni's unclear privatization plans pose major challenges for financial experts.

According to a report by www.stuttgarter-nachrichten.de,

The Italian Prime Minister Giorgia Meloni is planning extensive proceeds from the privatization of companies, but there are hardly any concrete plans. The draft budget for 2024 is based on completely unrealistic assumptions, which raises considerable doubts.

The planned privatization revenues of 20 billion euros by 2026 appear to be unrealistic as there are hardly any signs of privatization. Instead, the state has expanded its influence in the economy and plans to invest in some companies. However, the only concrete privatization project, the sale of a state shareholding in the Monte dei Paschi di Siena bank, finds hardly any interested parties.

Without privatization revenue, Italy would have to significantly increase its efforts to reduce debt - for example by cutting spending by around 60 billion euros by 2026. Otherwise there is a risk of a debt ratio of around 150 percent.

The unrealistic privatization plans in Italy have far-reaching effects on the financial sector. The planned privatization proceeds of 20 billion euros by 2026 are unlikely as there are no concrete signs of privatization. This lack of revenue could result in Italy having to step up its debt reduction efforts to ensure sustainable fiscal policy.

The spending cuts or tax revenues required to close this gap would severely impact households, businesses and the entire market. This uncertainty about the financial future can also affect companies' willingness to invest and weaken investor confidence in financial markets. It remains to be seen how the Italian government will actually implement its plans and what impact this will have on the financial sector.