DAVOS, Switzerland (Reuters) - Italy is not worried about the prospect of the European Central Bank ending its asset-buying programme and thinks its banks could benefit from the move, Economy Minister Pier Carlo Padoan said on Wednesday.
The ECB has decided to reduce the size of the programme that has seen it buy some 1.5 trillion euros worth of bonds in the last two years and is due to wrap it up at the end of 2017.
Padoan told Reuters in an interview that Italy, which has one of the world’s biggest public debt piles, was not concerned about the prospect of losing the stimulus from Frankfurt.
“This is not bothering us because we are managing the composition of our public debt ... We have already cashed in the benefits of low interest rates,” he said at the World Economic Forum in Davos.
Padoan suggested phasing out the scheme could be good for Italy’s banks, which are groaning under almost 200 billion euros (173.04 billion pounds) in bad loans, as it would end an era of very low interest rates.
“With higher interest rates the banks will have wider margin to get profits so this will help improve their balance sheet position,” Padoan said.
Following concerted stake-building by France’s Vivendi (VIV.PA) in broadcaster Mediaset (MS.MI), and a merger between eyewear makers Essilor (ESSI.PA) and Luxottica (LUX.MI) which will create a Paris-listed group, Padoan said interest in Italian firms was a sign of their quality.
“There is an element of paranoia in the debate,” he said. “The fact that many Italian companies are being considered by other companies is a sign that there are many good, profitable Italian companies.”
Regarding Mediaset, which is controlled by former prime minister Silvio Berlusconi, Padoan said: “We are of course watching what is going on, but these are private companies so the government has nothing to do or say specifically.”
Reporting by Alessandra Galloni; Writing by Isla Binnie; Editing by Gareth Jones