Italy poised to shake up Treasury with new unit for state-run firms

Italy is set to launch a new department at the economy ministry to take charge of managing state-controlled companies and asset disposals, two sources familiar with the matter said.

The proposed shake-up will enable Economy Minister Giancarlo Giorgetti to put a trusted aide at the heart of ministry operations to deal with some of Italy’s most delicate corporate issues.

The audit court on Thursday approved the decree needed to set up the unit, the sources said, despite making critical observations about some aspects of it.

Giorgetti has approached former banker Marcello Sala, currently director for investor relations at the Treasury, to lead the department, they added.

Antonino Turicchi, the chairman of national airline ITA Airways, had also been seen as a potential candidate for the position, but now is tipped as the frontrunner to replace Dario Scannapieco at the helm of state lender Cassa Depositi e Prestiti (CDP) next year.

Under the reorganisation plan, the influential Treasury department within the ministry led by veteran economist Riccardo Barbieri would be split into two units.

The Treasury will continue to supervise public debt management, macroeconomic policies, European and international relations as well as financial regulation.

A newly created “Department for the Economy” will have its own director general and will handle decisions regarding government-controlled firms such as CDP, public assets and state guarantees on banking loans.

Critics, however, flag the risk of overlapping structures and say the plan could weaken one of Italy’s most important public administrations.

With Italy studying ways to cut its 64% stake in bailed-out bank Monte dei Paschi di Siena (MPS) including share sales on the market, investment banks see the head of the new department as the person to approach to secure mandates for any deal, separate banking sources said.

The new department will also help Giorgetti identify other companies in which the state could sell minority stakes, as Italy considers the possibility of selling assets to rein in its huge public debt, seen above 142% of gross domestic product (GDP) this year.

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