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Italian government approves $100B in growth measures, privatization, infrastructure projects
MILAN (AP) ' The Italian government on Friday announced measures worth '80 billion ($100 billion) to spur economic growth, streamline the notoriously bloated public sector and lower national debt, part of its attempt to convince international investors that its finances are sustainable.
The 60 wide-ranging measures approved by the Cabinet include the sale of government property, issuing preferential bonds for infrastructure projects and reducing staff for the premier's office and Treasury Ministry.
"Growth and reducing the dimension of the government are the inspiration and motivation for today's Cabinet meeting," Monti said.
Besides reducing staff, the government will also wind down agencies within the Treasury Ministry and reassign their functions to existing departments.
The actions take aim at one of the most persistent criticisms launched at the Monti government: too many reforms, like raising the pension age and re-imposing a tax on primary residences, penalize ordinary Italians while not taking a bite out of the nation's bloated public sector.
Monti's government of technocrats took office in November with a remit to protect the country from the sovereign debt crisis. Borrowing costs steadily dropped until contagion fears ignited in recent weeks. They skyrocketed this week after Spain accepted a bailout for its banks that investors fear could add to its public debt. The move raised perceptions that Italy could be next to need help, increasing pressure on Monti to move swiftly.
Among the measures announced, the government plans to raise '10 billion through the sale of financial and oversight companies controlled by the Treasury, and use the money to bring down the debt levels and pay off creditors. The government also plans to sell real estate, including abandoned military barracks that have lain unused since the end of the Cold War.
The government will also simplify bankruptcy filings so companies can restructure debt and relaunch their businesses, as well as shorten the length of civil proceedings, something which has proven to be a deterrent to foreigners investing in Italy.
"Growth is also slowed by the slow pace of civil trials, which will be accelerated by putting a filter on appeals," Justice Minister Paola Severino said.
Tax breaks will also be extended to small- and medium-sized businesses that power the economy, in particular construction firms, which have been hit hard by the crisis.