Italian Premier Mario Monti's outgoing cabinet of technocrats on Saturday issued a long-awaited decree law for a public debt-repayment plan to private companies.

At least 40 billion euros worth of debt payments were guaranteed to companies by the government, which plans to pay back 20 billion euros this year and 20 billion in 2014, Monti told a press conference.

He said the move will provide a cash injection fundamental for an economy which is experiencing its longest recession for 20 years. "The debts accumulated so far by public administrations had dumped the burden on the future of businesses and citizens," he highlighted.

Italian public administrations have one of Europe's worst track records for paying creditors, as they owe to companies, most in the construction and healthcare sectors, an overall debt estimated at between 90 and 130 billion euros.

Earlier this week Monti assured the European Commission that the debt-repayment plan will not affect the commitment of Italy to keeping its deficit for 2013 under the threshold of three percent of gross domestic product (GDP).

His outgoing government also denied rumors that would be turning to regional income tax hikes to fund burdensome debt repayments in a country whose public debt at 127 percent of GDP is the second highest in the eurozone after Greece.

The Italian debt-to-GDP ratio, an important parameter in its European Union budget obligations, fell 0.7 percent to three percent in 2012, exactly the limit set by the European Stability and Growth Pact (SGP).

Business associations had repeatedly called for urgent action as industries were suffering desperately from the lack of credit, and wished that the decree would give a boost to the crisis-plagued economy. (1 euro = 1.3 U.S. dollars) Endi

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