* Padoan says post office privatisation may be delayed
* Says stake sales of Eni, Enel may be accelerated
* Rules out additional budget correction this year
* Says EU overcoming "suspicions" on budget flexibility
By Gavin Jones
ROME, July 6 Italy will settle the debt arrears
it owes to private sector suppliers by the end of this year,
Economy Minister Pier Carlo Padoan said in a newspaper interview
on Sunday, pushing back previous commitments.
The Italian state owes some 75 billion euros ($102
billion)to private suppliers, according to the most recent data
from the Bank of Italy. The unpaid bills have starved companies
of cash and triggered layoffs, factory closures and
"We will ensure that the arrears are paid off by the end of
the year," Padoan told Corriere della Sera daily.
Prime Minister Matteo Renzi promised in March to pay back
all the debt arrears by July. Within a week he put back the
target date to September.
The government is finding it hard to tackle the problem
because of public finance constraints, inefficiency, uncertainty
over exactly how much is owed and a reluctance on the part of
some public bodies to acknowledge their debts.
In June, the European Commission opened a formal
infringement procedure against Italy because of its failure to
comply with the Late Payments Directive, which orders
governments to reduce payment delays to no more than 60 days.
Padoan also confirmed reports that Italy might delay the
privatisation of 40 percent of post office operator Poste
Italiane, which was planned by the end of this year.
But he said the government was considering accelerating the
sale of stakes in energy companies Eni and Enel
in order to keep the revenues from its privatisation
plans on track. Italy is aiming to raise 8-10 billion euros from
privatisations over the next two years to help cut its public
In other remarks, Padoan ruled out that Italy would have to
adopt additional budget correction measures for this year, even
though most projections for economic growth are well below the
government's official 0.8 percent forecast.
Italy's budget deficit will come in below the European
Union's ceiling of 3 percent of gross domestic product, Padoan
said, indicating this would be enough to avoid any mini-budget
even if the deficit exceeds Italy's official 2.6 percent target.
Speaking ahead of a meeting of EU finance ministers next
week, the first since Italy assumed the six-month rotating
presidency of the EU this month, Padoan said governments were
still negotiating over how to grant more budget flexibility to
countries carrying out structural reforms.
One sticking point had been a lack of agreement over the
effect that certain reforms had on economic growth and over what
time frame, he said, adding that until consensus was found over
such technical issues it would be difficult to make progress.
"It's clear that if we can't agree over how long a metre is
then we are not going to get very far," Padoan said.
He said it was "useless to deny" that there had also been an
attitude of suspicion among EU politicians over why the issue of
budget flexibility was now being debated, but that ministers now
recognised the need to "take the suspicion off the table."
($1 = 0.7331 Euros)
(Editing by Mark Potter)