-Bureaucracy, delays, technical issues are main cause
-PM Meloni wants to re-negotiate new targets with Brussels
By Silvia Marchetti
ROME (MaceNews) – Italy’s rightist government risks losing some EUR 44 billion of European direct pandemic aid, and potentially even more, as it struggles to use all the money within set targets and timelines.
Both opposition and ruling coalition sources confirm it might fail to utilize all the resources granted by Brussels as the government has failed to meet a series of required benchmarks.
“Let’s face it, we might need an extension to 2027 to invest all the money, and to renegotiate with the European Commission key projects and timelines. This cabinet has been functioning only since October and we’re no wizards, we can’t do miracles,” said a government official.
Rome should get a total of EUR 200 billion in post-pandemic grants and cheap loans through 2026, making it the EU’s largest beneficiary thanks to the work of the previous government of Mario Draghi.
“Now, we risk squandering all these efforts because of delays. New PM Giorgia Meloni’s team is falling behind both on targets agreed with Brussels in return for the aid and also on investing resources already received,” warned a 5 Stars Movement source, the opposition party.
According to a recent report by Italy’s National Court of Auditors, Rome has so far spent EUR 23 billion, just over a third of the EUR 67 billion received since 2021 and divided in three more or less equal tranches. By now, said the Court, Italy should have spent at least EUR 40 billion.
Brussels gradually disburses the funds based on Italy meeting a series of agreed targets, including reforms of public policy, ‘green’ investments and newer digital infrastructure.
The EC has put on hold a fourth disbursement of roughly EUR 19 billion, demanding clarification over Rome’s efforts to meet the conditions linked to the money, which include investments in 55 key projects.
“If this fourth tranche lands, it won’t be anyway before two months. And if Rome fails to show progress on the pandemic investment plans, we’ll have to give the money already received back to Brussels and may well face the risk of giving up future aid,” warned a Democrat source.
Several government officials confirm that some projects can’t be completed by 2026, adding that to finalize the entire investment plan Rome would need to be granted a deadline extension to 2027 and beyond, if possible.
Even though PM Meloni brushes away the risk of losing even a single cent, her own cabinet recently cleared a budget plan in which the pandemic funds’ contribution to GDP growth in 2022 amounts to just 0.1 percent, proof, according to the opposition, that so far Rome has spent almost nothing of what it has been granted.
Government sources explain that the funds’ benefits are now lower than expected due to bureaucratic and technical delays in spending the money, but will have a greater, ‘multiplier effect’ in the long term.
“The impact of EU aid on GDP for this year and next rises to 0.8 percent, while in 2025 and 2026 it will unleash its full potential, reaching 3.4 percent. We need to have patience,” said an official.
“The government is buying time and trying to fool Brussels into believing that even though Italy has been getting the money since 2021, all these investments will bear fruit only starting this year, squandering whatever Draghi has done before,” said the Democrat source.
Previous forecasts by the former cabinet of Draghi suggested that the pandemic funds would have contributed by 0.4 percent to GDP growth in 2022, while Meloni has cut it down to 0.1 percent.
There’s also the risk that when the government will revise fiscal targets in September, it may have to cut final growth estimates for this year due to more delays in spending EU money, or if Brussels puts all future tranches on hold, said the 5 Stars source.