Italy working fast to push through incentives to retail govt bond buyers

Rome: Italy is working fast to render effective fiscal incentives to domestic buyers of its sovereign bonds, Economy Minister Giancarlo Giorgetti said on Thursday, as Rome prepares a new retail issue in late February.

The move is part of a drive to have an increasing amount of the government’s debt in domestic hands and limit the impact of any future financial crises.

This year’s budget law allows savers to take up to 50,000 euros ($53,765) worth of government bonds out of the ISEE, a wealth index the state uses to assess eligibility for welfare benefits.

Addressing lawmakers during a Q&A session in the upper house of Parliament, Giorgetti said his ministry had already drafted the decree needed to enforce the incentives, which would now require an opinion from Italy’s state council before taking effect.

“We are absolutely aware of the importance of ending this bureaucratic process, and given the timescales of the Italian bureaucracy, this process appears particularly fast,” he told senators.

The incentives have drawn criticism from opposition parties and academics, who argue that they help the well off rather than the poor who are supposed to benefit from the ISEE.

Listing advisers have also warned that the Treasury’s retail funding policy is diverting capital away from businesses in need of capital.

The Treasury in 2023 issued 44 billion euros in bonds for retail investors, who hold 13.5% of its debt, more than double the level of mid-2022.

Giorgetti said the incentives would also apply to savings certificates issued by state lender Cassa Depositi and Prestiti (CDP) and placed by postal service Poste Italiane (PST.MI), opens new tab.