Speculation raised by Italy's privatization plan draws public attention

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Speculation raised by Italy's privatization plan draws public attention

By Eric J. Lyman (Xinhua) 19:36, October 31, 2013

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ROME, Oct. 31 -- Facing the need to pay down debts in a sluggish economy, the Italian government has begun mulling the sale of state assets, in a move that has proven to be controversial in the country that has a long history of state participation in the economy.

Until 2000, Italy had a state holding company, the Institute for Industrial Reconstruction (IRI), which helped fuel the country's post-World War II economic boom.

IRI, once one of the world's 10 largest companies in terms of revenues, oversaw an array of state-run enterprises, including a national airline, banks, broadcasters and chemical producers.

In the early 1990s, Italy began to privatize those assets, and the process sped up under the 1996-1998 government of Romano Prodi, a former IRI president, as the country labored to get its fiscal accounts in shape so it could qualify to use the new euro currency.

After IRI was closed, remaining state assets were privatized periodically until now.

Almost sure to be sold in the coming months is all or part of the state's remaining 4.3-percent ownership of Eni, a state oil exploration, transport and distribution company. But the fate of RAI, the state broadcaster, is the most controversial issue in Italy.

For years, RAI's three channels were the only options for Italian television owners until small, regional commercial broadcasters started sprouting up.

Now the company battles against Mediaset, a media giant owned by billionaire and three-time Prime Minister Silvio Berlusconi, and Sky-Italia, a satellite broadcaster controlled by Rupert Murdoch's Twenty First Century Fox.

Asked about the government's privatization plan, which should be unveiled by the end of this year, Economy Minister Fabrizio Saccomanni opened up speculations about a possible sale of all or part of RAI.

"RAI is one of the companies the state owns and we are looking at all options," he said over the weekend.

Several government officials tried to dampen the speculation as Saccomanni's remarks drew criticism from Italians, in particular RAI employees.

Antonio Catricala, deputy minister of economic development and former head of Italy's antitrust regulator, said Saccomanni was just trying to make the point that nothing had been ruled out. But the economy minister has so far declined to back peddle from his statement.

Analysts say RAI, the largest employer in the media sector with more than 10,000 employees, is unlikely to be sold.

Moreover, after losing nearly 200 million euros (274.5 million U.S. dollars) last year, it is reportedly on pace to return to profitability by the end of next year.

But as more assets move from the treasury to the private sector in the coming months, Italians are paying close attention to the fate of RAI, as well as other state-owned companies.