Rome

Italy state finance arm to invest up to 95 bn euros in 3 yrs

CDP announces plans to add 6% to Italian GDP 2013-2015

Italy state finance arm to invest up to 95 bn euros in 3 yrs

Rome, August 1 - The savings and finance arm of the Italian state, Cassa Depositi e Prestiti (CDP), will plough up to 80 billion euros - the equivalent of nearly 5% of Italian economy - into public sector investments over the three-year period 2013-1015, according to the CDP's new industrial plan guidelines, the institution announced on Thursday. The CDP said it may also invest up to 15 billion euros - for a total of 95 billion - in investments targeted at expanding the CDP's range of activities, adding roughly 2% to the gross national product per year, or 6% over three years. ''In a challenging macroeconomic environment and with a contraction in the supply of credit from the financial system, the CDP Group will continue to play its counter-cyclical role as a long-term investor, using the private-sector resources it raises - first and foremost the funds from postal savings - to focus its action on the 'healthy drivers' of economic development,'' the CDP said in a statement. Those ''healthy drivers'' include supporting investment by ''public administrations; financing 'smart' infrastructure; supporting enterprises and exports,'' the CDP said. The institution also plans to focus on development in southern Italy, in energy networks and other strategic assets, as well as the international development of Italian small-to-medium and strategic businesses. Over the three-year period 2011-2013, the CDP will have mobilized resources worth 57 billion euros, or 14 billion euros more than originally planned, the institution said. The CDP noted two major efforts in which it is acting as primary operator: paying off public debts to the private sector and generating innovative real estate solutions to social housing. On Wednesday the Italian Senate approved the allocation of an additional 20 to 25 billion euros to pay overdue bills owed by the public sector to private businesses, to be paid through State-backed promissory notes redeemable from a fund at the CDP. The sum is in addition to the 40 billion euros already allocated to settle languishing supplier invoices in hopes of giving a much-needed boost to the country's recession-hit businesses. The Bank of Italy reckons the Italian public administration owes an estimated total of 90 billion euros to private suppliers. The CDP is a financial corporation that is 70% owned by the State and 30% owned by Italy's 65 non-profit banking foundations. It has acted as a public sector bank since servicing Piedmont's Savoy dynasty in the second half of the 1800's, and became a major national institution after the unification of Italy in 1865. A major source of the CDP's funds come from financial products of the Italian postal system, which has performed banking functions since 1875.

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