Italy needs sovereign wealth fund to lure private savings, says Meloni

Milan: Italy needs a sovereign wealth fund to funnel its large private savings into the corporate sector and boost the economy, Prime Minister Giorgia Meloni was quoted as telling the Milano Finanza newspaper.

“A national sovereign wealth fund, open to private contributions, could be the right instrument to relaunch investments, channelling Italy’s enormous savings towards productive ends, for the nation’s industrial and technological development,” Meloni said in an interview published on Saturday.

Italy already has a state lender, Cassa Depositi e Prestiti (CDP), which lends money to local administrations and invests in projects deemed of national interest, but is less active in the corporate sector than a sovereign fund.

Meloni also said she was working with economy and finance minister Giancarlo Giorgetti to increase the share of Italians who invest in government debt but ruled out a tax cut on domestic government bonds.

The country, which has the highest debt to GDP ratio in the eurozone after Greece, should make its debt pile more sustainable by spurring economic growth, she said.

Meloni also spoke about the EU Stability and Growth Pact, a set of fiscal rules to limit government borrowing and safeguard the value of the euro currency.

Talks are underway for a reform of the pact due to large investment needs in some member states following the pandemic, and Meloni, who is the leader of far-right Brothers of Italy party, said austerity measures implemented to rein in public debt proved useless.

“The new stability pact will have to be growth-oriented, which does not mean a lessening of the focus on public accounts, but using resources appropriately and launching appropriate policies,” she said.