In a bold move to address Italy’s substantial public debt, Prime Minister Giorgia Meloni’s government is considering the sale of a stake in Poste Italiane, the nation’s postal service, once hailed as Italy’s ‘crown jewel.’ According to a report by AFP on Monday, the hard-right administration aims to generate €20 billion ($21.6 billion) by 2026 through the partial divestment of Poste Italiane.
Poste Italiane, known for its lucrative insurance and banking activities, is a significant asset for the government’s financial strategy, alongside holdings in the rail company Ferrovie dello Stato and the energy giant Eni. However, analysts express skepticism, stating that the sale of a portion of Poste Italiane may have limited impact on Italy’s staggering debt, which stands at over €2.8 trillion ($3 trillion) – the second-highest in the eurozone as a proportion of gross domestic product.
Giorgia Meloni, the leader of the post-fascist Brothers of Italy party, who won the 2022 elections on a populist, nationalist ticket, has pledged to maintain state control despite the partial privatization. “We can sell some stakes in public companies without compromising public control,” Meloni stated, marking a shift from her previous opposition to the privatization of Poste Italiane in 2018.
Initially planning to hold a 51% majority in Poste Italiane, Finance Minister Giancarlo Giorgetti announced on Friday that the government’s stake could potentially fall to as low as 35%. The move is met with opposition from Italy’s Opposition, including Matteo Salvini’s far-right League party, who argue against selling national assets.
The initiative for partial privatization began in November with the government’s decision to sell a 25% stake in Monte dei Paschi di Siena, the world’s oldest bank, for €920 million. This move is part of the conditions set by the European Commission in the bailout agreement. However, critics argue that these partial privatizations are insufficient to address Italy’s debt crisis and may not alter the larger economic landscape.
The Giorgia Meloni government faces a significant challenge in reducing the debt, which currently amounts to 140.2% of the GDP. The government anticipates that asset sales will decrease this ratio to 139.6% by 2026, preventing it from rising to 140.6% without such measures.
