May 21, 2020 / 11:58 AM / 14 days ago

Italy's PM announces red tape cutting drive to boost investment

ROME (Reuters) - Italian Prime Minister Giuseppe Conte told parliament on Thursday his government was preparing a raft of reforms to cut red tape, improve company governance and encourage investment to revive the coronavirus-battered economy.

FILE PHOTO: Italian Prime Minister Giuseppe Conte wears a face mask as he attends a session of the lower house of parliament on the coronavirus disease (COVID-19) in Rome, Italy April 21, 2020. REUTERS/Remo Casilli

Conte promised a so-called “simplification decree” to attract foreign capital by streamlining bureaucratic procedures, and said Rome would help the recapitalisation of companies hit by the pandemic.

“If we do not succeed in simplifying procedures even in a condition of absolute emergency, I say this very frankly, I doubt that it will be possible to do so in the future”, he told the Chamber of Deputies.

Italy’s complex bureaucracy has long been blamed as one of the causes of its anaemic economic growth, and red tape delayed financial aid promised to business and families during a rigid lockdown to try to curb coronavirus contagion.

The European Commission has forecast Italy’s economy will contract by 9.5% this year, while the public debt is expected to jump to 158.9% of national output.

A government source told Reuters a scheme to discourage listed companies from moving abroad and help long-standing Italian shareholders ward off hostile bids was under consideration in the upcoming decree.

Conte did not say when it would be presented.

Under the plan, Italian shareholders could be allowed three votes for each share they own, strengthening their control over companies.

This would remove one of the incentives which have led major Italian firms to move abroad in recent years. Similar multiple vote schemes in other countries have encouraged some family-led Italian companies to move to help them retain control.

“We are considering to improve governance models to make them more efficient, without compressing minority rights,” Conte said.

Reporting by Angelo Amante and Giuseppe Fonte; writing by Angelo Amante; Editing by Gavin Jones and Alex Richardson

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