ROME (Reuters) - Italy will consider paying a backlog of tens of billions of euros of overdue bills to companies more quickly in an attempt to stimulate a still-stagnant economy, Economy Minister Fabrizio Saccomanni told parliament on Wednesday.
Late payment by public authorities to private suppliers has been a source of bitter complaint from companies facing growing difficulty obtaining credit from banks.
The state took an average of six months to settle bills from private firms last year, the longest in the European Union, according to business group CGIA Mestre. Agreed payment times are typically two or three months.
The government has already agreed to settle 40 billion euros ($50 billion) of arrears over the next two years but the center-right of the ruling coalition wants payments concentrated in the second half of 2013 so they can have more impact on the economy.
"An acceleration would certainly be desirable and will be carefully considered in the coming weeks," Saccomanni told the Chamber of Deputies budget committee.
While speeding up the payments would increase Italy's huge public debt this year, Saccomanni said it would help the economy to recover and also increase sales tax revenues.
The center-right's main economic spokesman, Renato Brunetta, said this week that bringing forward the 20 billion euros which had been due to be paid in 2014 by a year would generate an extra 4 billion euros of sales tax income this year.
Italy's room for maneuver on its finances is limited, with public debt of more than 130 percent of gross domestic product and a deficit which the government is struggling to hold under the EU limit of 3 percent of GDP.
Saccomanni, addressing parliament on the day the European Commission formally removed Italy from its blacklist of high deficit countries, assured lawmakers that data to June was consistent with meeting Italy's full year deficit-to-GDP target of 2.9 percent.
The former central bank official also said he expects the economy to recover in the final quarter of this year, ending Italy's longest post-war recession, thanks to export growth.
"I think I'm the only one that continues to see a bit of light at the end of the tunnel and it's not the train that's coming to hit us," Saccomanni said.
The economy has been contracting since mid-2011 and recent data has been mixed, with some signs of revival in the manufacturing sector but a persistent slump in construction, retail and services, as domestic demand remains extremely weak.
Saccomanni said he saw "ample margin" to reduce public spending, and this would be the main goal of his ministry in order to free up resources to cut taxes.
However, he stressed that this would need tough political decisions for Prime Minister Enrico Letta's broad, left-right coalition which has bickered continually since taking office in April, and would in any case not be possible before next year.
"In the very near term the budget items are rigid and cannot be modified, so the room for spending cuts is limited," he said.
Spending cuts could and should be achieved in all sectors of government, Saccomanni said, but he did not go into specifics or say which areas he wanted to start trimming first.
(Writing by Gavin Jones and James Mackenzie; Editing by Louise Ireland)
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