Italy Agrees to Sell Public Assets, Introduces Growth Measures

The Italian government of Prime Minister Mario Monti on Friday said it approved measures that will allow it to sell initially some 10 billion euros ($12.6 billion) of public assets in about a month to slash the country's public debt.

"We will reduce the state's assets, firstly with a quick sale of [three government agencies] SACE, Simest and Fintecna worth EUR10 billion to [state-controlled lender] CDP," said Deputy Economy Minister Vittorio Grilli at a press conference in Rome following a cabinet meeting.

SACE is a credit export agency, Simest is an entity that promotes foreign expansion by companies, and Fintecna deals with state-asset management.

Mr. Grilli ruled out any plans at present to sell the treasury's remaining controlling stakes in key companies Eni SpA (E), Enel SpA (ENEL.MI) and Finmeccanica SpA (FNC.MI).

The government also approved a decree targeting measures to promote growth after a series of tax-laden austerity packages crippled domestic demand and consumer confidence hit a record low.

"These measures will free up funds worth between EUR30 billion and EUR35 billion in new resources," said Industry Minister Corrado Passera.

Italy , which must service a public debt of more than EUR1.9 trillion, or 120% of gross domestic product, is facing a sharp economic contraction. The government estimates gross domestic product will shrink 1.2% this year, while the European Commission and the International Monetary Fund, among others, see a bigger decline.

Friday's measures approved by the cabinet are "robust," said Premier Monti at the same press conference.