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Ministry of Economy and FinancePUBLIC ADMINISTRATION TRADE DEBTS: EUR 3.6 BILLION PER MONTH SETTLED ON AVERAGE BETWEEN JULY AND DECEMBER

With Decree-Laws no. 35/2013 and no. 102/2013, the Government made some EUR 27 billion of resources available to debtor entities, roughly 90% of which was used to settle trade debts of approximately EUR 22 billion.

Press release N° 21 of 01/22/2014

Rome, 22 January 2014 – Inaugurated with Decree-Law no. 35/2013 and expanded later with Decree-Law no. 102/2013, the programme covering the payment of the past-due trade debts of the public administrations as of 31 December 2012 allowed for injecting around EUR 22 billion of liquidity into the real economy over a period of six months (July-December 2013). Such amount is equivalent to almost 1.6 points of GDP.
The debtor entities tapped EUR 24.5 billion of available resources (of the EUR 27.2 billion provided overall by the decrees covering the debt payments), and in past months, they settled past-due debts amounting to EUR 21.6 billion. On average, this was equal to EUR 3.6 billion per month during the second half of 2013. A total of EUR 2.3 billion has not yet been requisitioned by five of the regions to which the funds were assigned.
As to the first phase, governed by Decree-Law no. 35, the debtor entities procured resources totalling EUR 18.5 billion and made payments amounting to EUR 16.5 billion (corresponding to 84% of the resources appropriated).
As to the additional tranche of funds governed by Decree-Law no. 102, the debtor entities procured resources for EUR 6 billion, with EUR 5.1 billion thereof already paid to creditors.
A total of approximately EUR 2.9 billion of the funds assigned in 2013 is now being paid out in early 2014.

Fabrizio Saccomanni, the Minister of the Economy and Finance, is pleased with the results, stating "I need to thank all of the offices involved at the Ministry of the Economy and Finance, as well as political leaders and the representatives of local entities who comprehended the importance of this transaction: we injected real liquidity into the economy to the tune of EUR 3.6 billion per month from July through December; the resources we made available to the economy are equivalent to 1.6 points of GDP. I believe that the curtailment of the decline in GDP achieved in the third quarter of 2013 and the growth that we expect to report for the fourth quarter are also the by-products of the intense commitment in this transaction." Saccomanni added, "We have dedicated the utmost effort to the implementation of legislation crucial to favouring economic recovery. Initiatives of this type often come to nothing because once they are legislated and an announcement is made, little attention is paid to the subsequent phase when difficulties are encountered and one runs the risk of getting bogged down by inefficiency. This programme, however, has shown how the State can really serve the community."


MONITORING
The Ministry of the Economy and Finance (MEF) has inaugurated regular monitoring of the state of completion of the entire programme. The monitoring, which includes the involvement of the State General Accounting Department, is aimed at ensuring both the proper allocation of the financial resources and the respect of the commitments of the debtor entities to use these resources for the prompt repayment of past-due debts.


PUBLICATION ON THE MEF SITE
Prompt public disclosure about implementation of the programme is ensured by the monthly publication of updates on the MEF website (debitipa.mef.gov.it) which allows for viewing summary tables and for downloading files with details about the payments made by local entities.


FINANCIAL MECHANISMS IN RELATION TO THE PAYMENTS
Decree-Law no. 35/2013 and the subsequent Decree-Law no. 102/2013 provided for an array of financial mechanisms that would rapidly free up liquidity amounting to EUR 27.2 billion to be used for the payment in 2013 of trade debts certified as liquid and collectible as of 31 December 2012. These mechanisms include: cash advances to local entities on the basis of an agreement between the Cassa Depositi e Prestiti S.p.A. and the Treasury; Treasury financing of the regions and autonomous provinces; exclusions from the Domestic Stability Pace; exceptions to the Domestic Stability Pact for expenditures made for the co-financing of initiatives planned with EU structural funds; and the increase in tax refunds. Each of these mechanisms entails agreements between the parties for the proper use of the resources and for the accounting reconcilement of the payments. While the timing varies for the monitoring of the various initiatives, the MEF, working with the Cassa Depositi e Prestiti, the National Association of Italian Municipalities (ANCI) and the Union of Italian Provinces (UPI), has managed to provide regular oversight of the payments certified. The figure reported at present might be less than the payments actually made to date since complete information on the use of the regions' resources is not available.


SUMMARY TABLES (data in EUR mn)
Payment of the public administrations' trade debts outstanding as of 31/12/2012 (Decree-Laws no. 35/2013 and no. 102/2013)

Debtor entities Resources Allocated Resources Actually Made Available to Debtor Entities Payments Made to Creditors
State 3,000 3,000 2,827
Regions and autonomous provinces 15,808 13,499 12,889
Provinces and municipalities 8,411 7,995 5,907
Total amounts (absolute values) 27,219 24,494 21,623
Total amounts (% of resources allocated)   90% 79%

Other data are provided as an exhibit to this note, in addition to the data that can be downloaded from the site: debitipa.mef.gov.it.

SUMMARY PRESENTATION OF DECREE-LAW NO. 35/2013 and DECREE-LAW NO. 102/2013 TO SETTLE DEBTS - IMPLEMENTATION STATUS (PDF, 736 Kb)

Roma 01/22/2014
IT

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