Italy Sees Revenue From State Asset Sales Worth 0.8% of GDP Through 2028

Italy Plans €19bn in State Asset Sales to Stabilize Debt by 2028

Overview of Italy's State Asset Sale Strategy

By Giuseppe Fonte

ROME, April 23 (Reuters) - Italy estimates revenue from state asset disposals through 2028 worth around 0.8% of national output, or almost 19 billion euros ($22.21 billion), a government document showed on Thursday.

Key Assets Targeted for Disposal

Options being discussed could see sales of stakes in air traffic controller ENAV, bailed out bank Monte dei Paschi di Siena (MPS) and energy group Eni, as well as listing the state mint, sources familiar with Rome's thinking of the matter said.

Budget Plan Projections

The Treasury said in its multi-year budget plan (DFP) that projections for the debt-to-GDP ratio factor in asset sales worth 0.2 percentage points this year, 0.5 points in 2027 and 0.1 in 2028.

Debt Trajectory and International Comparisons

Italy sees its debt rising from 137.1% of GDP in 2025 to 138.6% in 2026, above a forecast of 138.4% by the International Monetary Fund which estimates Italy will overtake Greece this year as the euro zone's most indebted country.

The DFP projects Italy's debt will remain virtually stable at 138.5% in 2027, before declining to 137.9% in 2028 and to 136.3% the following year.

Government's Asset Sale Initiatives

Initial Announcements and Adjustments

Shortly after taking office in late 2022, Prime Minister Giorgia Meloni announced the government could garner 20 billion euros from asset disposals to keep the debt in check.

Since then, however, Rome has progressively scaled down its plans and the previous budget plan unveiled in September did not include official targets.

Progress So Far

Italy has so far collected just above 4 billion euros under Meloni, by selling 52.5% of MPS and 2.8% of Eni through share placements.

Future Sale Projections and Criticism

Projected Revenues and Election Timing

WINDOW DRESSING?

The DFP published on Thursday foresees almost 5 billion euros from asset sales this year and an additional 12 billion in 2027, the year of a scheduled general election, but provides no guidance on the type of assets to be sold.

Audit Court Concerns

Italy's independent audit court has said in recent years that sell-off plans may be substantial "window dressing", aimed at painting a more promising budget picture.

Potential Sales: MPS, ENAV, and Eni

Meloni said in an interview with Bloomberg in February that Rome's role in MPS had ended, raising the prospect of a sale of the state's remaining 4.9% stake, which is worth 1.36 billion euros at Thursday's market prices.

The sale of a stake in ENAV would require Rome to adopt a decree, the sources said, as current legislation states that the Treasury should maintain at least 51% of the company.

With regards to Eni, the sources said investment bankers have suggested to the Treasury that Italy sell the 2.17% stake it holds directly, potentially pocketing 1.5 billion euros.

Under such a scheme, Italy would retain full control of Eni through the 30.92% stake held indirectly via state lender Cassa Depositi e Prestiti (CDP), the sources added.

Other Privatization Efforts

The government has also taken steps to return to private hands BDM, a small bank rescued in several steps since 2010.

Additional Information

($1 = 0.8553 euros)

(Reporting by Giuseppe Fonte, editing by Alvise Armellini and Gavin Jones)