Italy to decide fate of top Treasury officials on Jan. 19, sources say

Italy's Prime Minister Giorgia Meloni

By Giuseppe Fonte and Angelo Amante

ROME (Reuters) - Italy's cabinet is likely to decide on Jan. 19 the fate of two influential Treasury officials, sources said, with nationalist Prime Minister Giorgia Meloni seen as pushing to appoint figures closer to her right-wing administration in key jobs.

Rome is due to decide to either confirm or remove the Treasury department director general Alessandro Rivera and the head of state auditors Biagio Mazzotta, both at the centre of Italian policymaking for years.

The right-wing bloc, which swept to power in a resounding election victory in September, has until Jan. 24 to replace heads of ministry departments, but Meloni aims to make a decision over the two officials before her trip to Algeria scheduled on Jan. 22-23, three government sources said.

The Treasury declined to comment.

State auditors are responsible for ensuring that expensive measures laid out by ministers and lawmakers are funded by compensatory measures so as not to weigh on the public deficit, a role that often upsets ruling politicians.

Treasury Director General Rivera in particular is in the crosshairs of Meloni and her top aides, who are unhappy with his handling of Italy's main financial dossiers, the sources added.

These include the privatisation of national airline ITA Airways and efforts to relaunch the country's fifth largest bank Monte dei Paschi di Siena (MPS), which is 64%-owned by the Treasury following a 2017 bailout that cost taxpayers 5.4 billion euros ($5.84 billion).

CRUNCH PHASE

Meloni said last month that MPS had been "very badly handled" so far at great expense to Italian taxpayers, a remark which some politicians took as an indirect criticism of Rivera.

However, Meloni conceded MPS's restructuring agreed last year by Rivera's top team with the European Commission "appears rather solid".

Soon after Meloni took office, Italy in November pumped another 1.6 billion euros into MPS as part of a planned 2.5 billion euro recapitalisation.

With talks within key government figures entering crunch phase, the sources cautioned that Economy Minister Giancarlo Giorgetti had so far rebuffed calls to replace Rivera, who served under three administrations.

Rivera deputises for the economy minister at G7 and G20 meetings and his department manages a public debt of roughly 150% of national output, the euro zone's second highest after Greece's.

ITA Airways chairman Antonino Turicchi and the head of public procurement agency Consip Cristiano Cannarsa are seen by separate government sources as potential candidates to replace Rivera.

Stefano Scalera and Stefano Cappiello, two Treasury officials who respectively help to implement Italy's post-COVID Recovery Plan and oversee financial regulation, are also under consideration for the position.

Contacted by Reuters, none of them replied to requests for comment.

Meloni will also in the next few months have to decide whether to replace or reappoint chairmen and CEOs when the boards of state-controlled energy groups ENI and Enel come up for renewal along with those of MPS, defence group Leonardo and power grid Terna.

($1 = 0.9225 euros)

(Reporting by Giuseppe Fonte and Angelo Amante; Editing by Susan Fenton)