News Analysis: Italy's plan to sell off state assets to ease debt not to work well
ROME, Aug. 12 (Xinhua) -- Have you ever wondered what it would be like to live in a lighthouse? Or a castle? A monastery? Now might be your chance.
Italy is looking to chip away at the country's massive levels of public debt by selling off state-owned buildings and properties.
Analysts said there may be too little to sell for it to make much of a difference.
The Italian government says it plans to sell off some 400 state-owned properties, including castles, monasteries, former prisons, historical villas, office buildings, commercial centers, agricultural land, individual houses and apartments -- and even a lighthouse.
The first 93 of those properties are open for bidding now, with bids due by October. Estimates are that the first round will raise at least 145 million euros (163 million U.S. dollars), according to Andrea Grigoletto, an attorney and a consultant with Italia Nostra, an advocacy group.
All told, the plan is expected to add at least 1.2 billion euros to state coffers over three years.
Properties sold will come from the state property offices, the defense ministry, and the finance ministry. In addition to paying down debt, Riccardo Carpino, head of the state property agency, said the sales will reduce maintenance costs and breathe new life into parts of the country where the structures and property are located.
But analysts are not so sure the sales will make a difference.
"This is not a new idea; the government first started selling off properties in 1996," Grigoletto told Xinhua. "The problem is, most of the properties that make the most sense to sell have been sold."
Grigoletto said that leaves properties with lower price tags or that are less interesting to buyers.
"There are other options that would easily sell, but it would be controversial to sell them," he said.
According to Alessandro Petretto, an economist with the University of Florence, the amount of money the sales are expected to raise would be too small to move the needle on Italy's foreign debt.
"The government has to be seen as doing something, but this won't make much of a difference," Petretto, also a member of the scientific committee with parliament's budget office, said in an interview. "A billion euros sounds like a lot of money, but in the context of the government's debt it is not large."
At mid-year, Italy's debt was 2.43 trillion euros -- about equal with France for the highest debt level in the European Union in absolute terms. At around 134 percent of the country's gross domestic product, Italy is behind only Greece by that measure.
To put that in perspective, the 1.2 billion euros the sales could fetch over three years is 2,000 times less than the government's total debt.
Earlier this year, Italy promised the European Commission it would sell various state assets worth at least 17 billion euros this year, as part of an agreement to reduce the government's budget deficit and avoid sanctions. Aside from the property sales, the rest of the plan is still pending.