But it is loans made to Local Government Financing Vehicles (LGFVs), special companies set up to fund ambitious and often redundant infrastructure projects, that have attracted the greatest attention.

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But these are for special projects, not running costs, and most fear that the fund's success has merely crowded out donations that would otherwise have gone directly to them.

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Until recently, San Benedetto benefited from the Cassa del Mezzogiorno, a special fund that paid for vast and often ill-conceived projects all over Italy's poor south.

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Also, the use of investment platforms (special investment vehicles) to fund local governments steers funds to SOEs involved in development projects, thereby affecting the balance between state and market.

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