Italy May Accelerate the Sale of Its Stake in Monte Paschi
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(Bloomberg) -- Italy may accelerate the planned sale of a stake in Banca Monte dei Paschi di Siena SpA to boost public finances as growth slows, according to Foreign Minister Antonio Tajani.
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“Italy might decide on Monte Paschi in the short term,” Tajani, who is also the deputy prime minister, told Francine Lacqua in an interview with Bloomberg Television at the Ambrosetti forum in Cernobbio, Italy. His Forza Italia party, a junior ally in the government coalition, backs a privatization push, he said.
Giorgia Meloni’s government has been evaluating the disposal of some assets as a way to allow Italy’s far-right coalition to fund new spending without adding to the country’s mammoth debt load. The move, however, could set off alarm bells with European Union regulators and in financial markets.
The decision to accelerate the sale of some assets comes as Italy faces worse than expected economic growth, further complicating Meloni’s effort to finance her electoral pledges. Growth contracted in the second quarter, and the government is confronting the prospect that it could overshoot its deficit targets of 4.5% this year and 3.7% in 2024.
“We need less state and more companies in the economy, also to attract new investments from abroad,” Tajani said Saturday, adding that such a plan will help to finance reforms, including the fiscal and the justice ones.
A disposal of assets could allow Rome to wind down its involvement in the bank by the end of next year, in line with EU requirements.
Siena-based Monte Paschi, which went through years of painful turnaround efforts after an initial bailout in 2009, has made progress in its most recent plan to revive profitability under Chief Executive Officer Luigi Lovaglio, making the bank more appealing.
Shares have increased about 30% since a €2.5 billion ($2.7 billion) capital increase implemented in November.
In order to pay for some of Meloni’s initiatives, the government is considering selling minority stakes in additional state-owned assets, including state railway Ferrovie dello Stato SpA.
“On Paschi, we need to go ahead with the sale process,” Tajani told reporters. “The state should not act as a banker.”
--With assistance from Alberto Brambilla, Francine Lacqua and Daniele Lepido.
(Updates with additional Tajani comment in the final paragraph.)
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