Italy's bold move: PM Giorgia Meloni sparks Global shockwaves, auctions 'Crown Jewel' to crush public debt

Italian Prime Minister Giorgia Meloni walked back on her own words over the privatization of Poste Italiane. To crush the increasing public debt, the Italian government took the extreme step of selling the majority of its stake in its 'Crown Jewel’.

Italy’s massive debt crisis has forced major policy outcomes due to tough decisions. The Italian economy has been performing underwhelmingly with an increase in debt. Prime Minister Giorgia Meloni sought tough decisions on Monday to fix the speeding debt crisis. 

According to a report from AFP, the Italian administration has decided to sell a percentage of its stake in Poste Italiane (Postal service in Italy). This has come as a huge shocker not only for the opposition but also for the people of Italy. Prime Minister Giorgia Meloni in her election campaign was against selling off public assets and privatisation.

She touted Poste Italiane as the Crown Jewel of Italy in 2018 and was strictly against any initiative to sell it. She said, “No to the privatization of Poste Italiane. It is a crown jewel that must remain in the hands of Italians.” The sudden change of heart from the Italian Prime Minister comes after Italy’s debt reached 2.8 trillion euros ($3 trillion) which is the second highest in the Eurozone as a proportion of gross domestic product.

The Italian government planned to sell 49 percent of its stake in the Poste Italiane. However, the latest information from Finance Minister Giancarlo Giorgetti suggests that the government’s control could fall to as low as 35 percent. Though the privatisation move could act as a short-term relief but analysts believe in the long run, the move will not impact the solving of the debt crisis.

The Italian government started its privatization efforts last year in November after selling 25 percent of its stake in Monte dei Paschi di Siena, which is recognized as the world's oldest bank. The deal was reached after an agreement of 920 million euros. The opposition has hit out at the government for its hypocrisy of preaching something and doing other things.