Failure to spend EU recovery funds would be a defeat for Italy, president

Rome- A failure to fully invest the money earmarked for Italy from a European Union post-COVID recovery fund would be a defeat for the nation, the head of state said on Thursday in calling on all political parties to show responsibility.

In 2020, Italy secured a lion’s share worth 191.5 billion euros ($213.20 billion) of cheap loans and grants from a 724-billion-euro kitty designed to help EU member states emerge from the pandemic greener and more tech-friendly.

The fund is seen as a once-in-a-generation opportunity to revitalise Italy’s chronically sluggish economy. But the government, is struggling to hit on time the policy targets initially agreed with the EU Commission to secure the instalments.

Obstacles include bureaucratic incompetence and a lack of expertise at managing such investment projects.

“Any failure or only a partial result would not be a defeat for the government but (rather) for Italy: that is how it would be seen and interpreted outside our borders, and that is what it would be in reality,” President Sergio Mattarella told an event with the parliamentary press.

Mattarella, who is not directly elected by citizens and has a largely ceremonial role, said the EU funds were “crucial” for Italy and both the right-wing ruling coalition and the opposition should make all efforts to ensure a smooth progress of the plan.

“Today I would like to emphasise that this is not an issue for the government, for this or the two previous governments, but for Italy,” Mattarella said.

The administration of Prime Minister Giorgia Meloni, in charge since October, announced this month a deal with the Commission to unlock a long-due tranche worth some 18.5 billion euros which had been frozen in March.

However, worries are mounting also over delays in spending some 67 billion euros already received that could dilute the positive impact on Italy’s GDP growth.

The plan was initially negotiated by the centre-left administration of Prime Minister Giuseppe Conte, while its first chapters were implemented during the government of Mario Draghi.

Meloni’s government has insisted Italy will receive and spend all the money and has blamed the previous administrations for the delays.