Italian plan to accelerate the liquidation of the large stock of trade debt accumulated by the public administration

On April 8, 2013, the Italian Government issued the Decree Law no. 35/2013, which aims establishing urgent measures for the payments of overdue debits of the public administrations to private companies, for the financial rebalance of regional and local administrations and for the payment of taxes to regional and local administrations.

The Government’s actions, which comply with the budgetary Stability Law for the period of 2013-2015, have the purpose to guarantee the payment of 40 billion euros worth to private suppliers of public administrations, over the next 12 months.

Further to the payments of overdue debits of the regional and local administrations, expired on December 31, 2012, the Decree Law no. 35/2013 states these debits are excluded from the internal stability pact for a total amount of 5000 million of euro.

In this regard, the Decree lays down that the local and regional authorities lacking their own resources to pay bills will receive money from the central state and will be asked to set out a plan to reimburse it within 30 years.

Moreover, the Decree Law no. 35/2013 sets out the obligation for all administrations in Italy owing trade debt arrears, including at regional and local level, to fully disclose their amount. This measure is considered very important to ensure transparency and to allow reliable estimates of the overdue payments.

Hence, under the urgent measures mentioned above, the Government intended to provide funds to cash-strapped firms and help Italy to recover from recession.

In this regard, on April 9, 2013, the European Commission reaffirmed its support to the Italian government’s plan to accelerate the liquidation of the large stock of trade debt accumulated by the public administration. The Commission welcomed the Italian government’s commitment closely to monitor implementation and to maintain the deficit in 2013 under the 3% threshold, in particular through the safeguard mechanism built in the Law Decree no. 35/2013 enacting the plan.

Source: Governo Italiano, EC press release