Critical voices doubt whether the planned privatization proceeds in Italy are realistic.

Critical voices doubt whether the planned privatization proceeds in Italy are realistic.

Italy's Prime Minister Giorgia Meloni has been in office for a year and is planning extensive proceeds from the privatization of companies. However, there are no concrete plans for this. According to a report by the Stuttgarter Zeitung, the draft budget for 2024 is based on unrealistic assumptions. In particular, experts consider the planned privatization proceeds of 20 billion euros by 2026 to be too optimistic. The Italian state currently holds large stakes in companies including the state railway Ferrovie dello Stato and the airline Ita Airways.

However, there are doubts as to whether privatizations will even take place. The state has expanded its influence in the economy through veto rights and even plans to acquire a stake of up to 20 percent in Telecom Italia's fixed network. The only concrete privatization project is the sale of the state's shareholding in the Monte di Paschi di Siena bank, but there are hardly any interested parties. The income from this sale would be manageable compared to the rescue money that flowed into the bank.

The lack of privatization proceeds could mean that Italy will have to increase its efforts to reduce debt, for example by cutting spending. One expert estimates that Italy would need an additional 60 billion euros by 2026 to ensure a sustainable budget. Otherwise, debt would rise dangerously close to 150 percent of gross domestic product.

It remains to be seen whether Italy will be able to achieve the planned privatization proceeds and adjust the budget accordingly. There is a possibility that spending cuts or other measures will need to be taken to reduce the debt burden. The development of the situation will continue to be closely monitored by experts and investors.

Source: According to a report from www.stuttgarter-zeitung.de