The government of the new Italian prime minister, Mario Monti, has issued draft legislation to reintroduce the Italian foreign trade promotion agency. The previous one, ICE, was closed by the government of Prime Minister Silvio Berlusconi in July as part of an effort to reorganize the agency, which was spending more money on its own operating costs than on promoting Italian products. The new draft legislation still has to be approved by Parliament.

The new agency is due to have a board appointed by the industry and foreign affairs ministries. It will have a staff totaling a maximum of 300 people on the payroll of the industry ministry. Staff employed abroad will be located in offices occupied by the foreign affairs ministry. ICE employed 1,200 people, half of whom were located in Italy, and it had 115 offices in 88 countries.

The shutdown of ICE upset the Italian business community, which is largely made up of small and medium-sized companies that often rely on public support for their exports. On average, Italian companies are three times smaller than German ones and twice as small as French ones.

The Italian footwear association, Anci, welcomed the re-establishment of the trade board but noted that the structure is minimalist and its promotion budget remains unknown. Anci sources advocate a promotion budget of at least €50 million a year. This compares with a budget of about €36 million spent in 2010, the last full year that ICE has been operation.

Anci said that it does not expect the new agency to be fully operative before the summer, which would leave Italy without a foreign trade office for about a year from the dismantling of ICE.

The association indicated that it started having difficulties in obtaining funds from ICE in March and that it had to cover this year eight trade promotion initiatives on its own, or with the help of its members, instead of getting financial support from ICE. To overcome the shortfall, Anci said that it had to cut costs.

The association stressed that it was important to confirm the establishment of a new agency before the end of 2011, otherwise there was the risk that permanent staff previously working for ICE would have been dispatched to other services. Anci said that it continued to be assisted by former ICE staff to organize events over the past months. However, employees on temporary contracts, often based abroad, were lost when ICE was closed.

The new setup is “better than what we feared but worse than what we hoped,” according to an Anci source.Anci expressed concern that the new trade board will be managed by two ministries as this could create some pitfalls, although the new structure is more manageable than the arcane solution that had been proposed by the Berlusconi government. The new proposal retains the idea of sharing the management of the trade board between the industry and foreign ministries, while giving the ministry of the economy a say in its strategy. But the Italian employers' association, Confindustria, the banking community and the chambers of commerce are no longer involved.

The relaunch of the trade board was included in a new austerity package launched by the new government to maintain Italy's pledge of balancing public accounts by the end of 2013 and to fend off international speculation against the country's solvability, which has led to higher yields on its government bonds, raising the cost of its public debt.