Senate approves additional 20-25 bn to pay private firms

Bank of Italy estimates total debt to private sector 90 bn

Senate approves additional 20-25 bn to pay private firms

Rome, July 31 - The Italian Senate on Wednesday unanimously approved the allocation of an additional 20 to 25 billion euros to pay overdue bills owed by the public sector to private businesses. The sum is to be made available after January 1, 2014, and is in addition to the 40 billion euros already allocated to settle languishing supplier invoices. The Bank of Italy reckons the Italian public administration owes an estimated total of 90 billion euros to private suppliers. Eligible private businesses will be granted promissory notes guaranteed by the state and redeemable from a fund at the State's savings and finance arm, the Cassa dei Depositi e Prestiti (CDP). The new allocation is contained in an amendment to a government ''labour'' decree to tackle youth unemployment by providing targeted tax incentives to employers. The government hopes paying its overdue bills will give a much-needed boost to the country's recession-hit businesses, and is a policy originally pushed by technocrat ex-premier Mario Monti to encourage economic growth. In April, a decree authorising the release of 40 billion euros over 12 months for the repayment of public administration debt to the private sector came into force - one of the very last moves taken by Monti prior to stepping down for the current government led by Premier Enrico Letta.

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