MILAN (Reuters) - Italy hopes to sell around 40 percent of state railways company Ferrovie dello Stato next year as part of a privatization drive to cut public debt, Economy Minister Pier Carlo Padoan told Il Messaggero in an interview published on Wednesday.
Padoan said the government was still looking to sell off a 40 percent stake in post office operator Poste Italiane and 49 percent of air traffic control operator Enav in 2015 -- which had both been slated for sale in 2014.
Under its privatization program, Italy’s treasury hopes to raise about 10 billion euros ($12.48 billion) every year to 2016 to cut back the nation’s public debt that is the second-highest in the euro zone after Greece‘s.
“That’s the objective. Clearly we need to take into account the markets, but we are confident,” Padoan said, speaking of next year’s privatizations. In 2014, Italy raised well under half the expected amount from sales.
However, a surge in the volatility of financial markets this summer has delayed some of the biggest disposals.
Padoan said the precise size of the Ferrovie stake that was expected to be sold off had not been decided, but thought it would probably be “not far from 40 percent”.
The government also has the option to put real estate assets on the market, Padoan said, but he cautioned they would consider it “a great result to scrape together a couple of billion euros a year” through that.
Commenting on the recent sharp fall in the price of crude oil, Padoan said Italy’s fragile economy could benefit.
“There is a school of thought according to which crude oil stabilized at a price of around $60 would generate growth of 0.5 percent in our gross domestic product,” he said.
The minister said he expected public debt to continue rising for much of next year and only start falling significantly from 2016, adding that “growth of around 1 percent and inflation close to 2 percent would suffice to reduce the debt problem to within limits of absolute tranquillity”.
He said these objectives were “absolutely” within Italy’s reach, given the reforms being introduced by the government to spur growth.
Reporting by Agnieszka Flak; Editing by Crispian Balmer