Italy will sell stakes in public entities including oil and gas company Eni to raise up to 12 billion next year and help cut public debt, Prime Minister Enrico Letta said yesterday.

Holdings to be sold include STMicroelectronics, shipbuilder Fincantieri, air traffic controller Enav and three per cent of Eni, though Italy will keep its overall stake in the energy company above 30 per cent, Letta said.

He told reporters after a Cabinet meeting that half of the amount raised from the sales would be used to reduce Italy’s debt in 2014, and added that he hoped this would help win more leeway from the European Commission on investments.

This is “a first step to not just to keep the 2014 deficit under control, but also to reduce total public debt for the first time in five years,” Letta said.

Italy’s public debt of around 133 per cent of gross domestic product is the second-highest in the eurozone after Greece. The €6 billion from the privatisations earmarked for debt reduction is equal to around 0.3 per cent of GDP.

Italy has been promising to launch a programme of privatisations and other asset sales for several years, but successive governments failed to get it off the ground.

Economy Minister Fabrizio Saccomanni told reporters the privatisation plan “adds a more concrete element” to debt-cutting commitments made by Italy to the European Commission this month.

He gave no precise timetable for the sell-offs.

The Commission refused to grant Italy any discretionary scope to increase public spending in investments because its original budget plan did not ensure a decline in its massive public debt.

Saccomanni said the state would sell around 60 per cent of Sace, which insures Italian exports, and 60 per cent of Grandi Stazioni, which runs retail areas in Italy’s railway stations.

He said it would sell off about 40 per cent of Fincantieri, 40 per cent of Enav and 50 per cent of CDP Reti, an arm of state holding Cassa Depositi e Prestiti (CDP) that owns part of power grid operator Terna and gas network operator Snam Rete Gas.

Letta said half the revenue from the sales would be used to pay down the public debt and the other half would used to recapitalise the CDP.

The sale of the stake in Eni, worth some €2 billion, will be conducted through a buy-back operation by the company which will ensure the state’s holding does not fall below its current level of 30 per cent, Saccomanni said.