Italians rush to share in privatisation: Second bank sell-off brought forward after first offer is massive success

THE FACE of a former Miss USA has launched 295,000 small investors - and Italy's huge privatisation programme is off to a roaring start.

The first big sell-off of shares - in Credito Italiano, Italy's sixth-largest bank - has proved a great success. Put on the market on Monday, by Tuesday night the demand was six times the 840 million shares available and yesterday the operation was closed three days ahead of schedule.

The government, which has made the privatisation programme one of its top priorities, was delighted and promptly asked IRI, the state holding company, to bring forward the sale of shares in the Banca Commerciale Italiana by around six weeks to February, when the sale of IMI, the financial services group, will also be held.

'The excellent result is an encouragement to carry on,' said the Prime Minister, Carlo Azeglio Ciampi. 'We must not waste the positive effect.'

Italy has the biggest state- owned sector among advanced Western countries: around 40 per cent of its industry and business. Successive governments have been talking about privatising for years, but action has been entangled in a vast web of hidden political interests. The state companies had become the virtual fiefdoms of the discredited old political parties, a prolific source of jobs, power, patronage and vast illicit funds.

The government plans to denationalise 19 state companies, whose interests range from petrochemicals, telecommunications and insurance to canned foods. The aim is to reduce the state deficit while creating a vast new share-owning public, create a bigger financial market and enable the stock exchanges - which are at present the preserve of just a few - to flourish. And to shake off the dead hand of political meddling.

It was not certain that it would work. Italians, contrary to their carefree image, save more diligently than anyone else but most put their savings into safe treasury bonds. Would they be prepared to take risks? The government launched a 10bn lire advertising programme to persuade them to do so.

This is where the former Miss USA came in, cool, efficient-looking, dressed in a grey chalk-striped double-breasted suit and assuring everyone that there were good investment opportunities 'beyond treasury bonds'. An added incentive was the price: 2,075 lire each for the 67 per cent of Credito Italiano that is up for sale, while they are quoted on the stock exchanges for 2,300 lire each.

The result was queues at banks all over the country. The feelings of the new capitalists were summed up, somewhat colourfully, by Carla Corso, founder of the committee for the civil rights of prostitutes, and a shrewd businesswoman. She felt, she told the daily La Repubblica, that she was closer to the world of the stock exchange 'a world which for us small savers was mythical, legendary, unattainable, a universe reserved for the very rich, the big businessmen.

'To find that I could go into a bank and order 'give me ten millions-worth' was immensely amusing. It gave me a feeling of omnipotence.'