MNI: Draghi To Push Through Court Reform, Start Budget-Aides

Mario Draghi is hoping to push through reforms overhauling Italy’s courts, competition rules and rules on government procurement during his remaining months in office before a new prime minister is appointed following Sept. 25 elections, aides told MNI.

The government is also likely to approve new measures to help households and business cope with soaring prices and will start work on the 2023 budget, though this is likely to have to be completed by the new government, the sources said.

After agreeing this week to carry on as caretaker until after a new prime minister is appointed following the elections, Draghi’s administration has been given additional powers to push through laws in response to emergencies like the energy crisis and the war in Ukraine and in order to meet National Recovery Plan conditions agreed with the European Union in return for NextGenerationEU funds.

“This government intends to continue working on the National Recovery Plan as far as possible,” one source said.

While laws and decrees necessary to meet Italy’s 55 targets set for 2023 in order to unlock a EUR19 billion NextGenEU tranche will still have to be approved by a parliament now in full campaigning mode, one government source noted that the European Commission allows extra leeway for countries undergoing elections.

TIGHT SCHEDULE

“Any delay will be understood,” the source said, cautioning however that there would be a limit to the European Commission’s patience and that taking too long to meet targets could result in the halting of payments or even in a demand for the return of EUR24.9 billion received in the second half of 2021. While the EU would be reluctant to impose penalties for missing commitments, many of the projects in Italy’s plan depend on being completed to a tight schedule. (See MNI: Italy Set To Narrowly Meet Targets For EU19Bln EU Tranche)

The government could also water down reforms in order to secure swift parliamentary approval. Next Monday a lower chamber committee will finally vote on a competition bill after an agreement to leave out the contentious subject of rules governing taxis.

While Draghi will aim to achieve as much as possible in what time remains to him, it seems he will have to leave reforms of the tax and pension systems to the next government, after failing to overcome deep disagreements among the parties of his coalition.

He should have time to complete the public finance framework that must be presented before Sept. 27 in preparation for the 2023 budget, though the budget itself may also have to be approved by the next government, sources said, noting that there was no precedent for elections at budget time. Under EU rules, Italy has to send a draft budget to Brussels by Oct. 15, only 20 days after the elections.

“Having a budget on time is an ambitious objective. The timing is tight, but it can be done,” a government source said, noting that there was an outside chance that Draghi could approve the budget himself if forming a new government took so long as to risk missing legal deadlines, which would mean the 2022 budget would simply be extended for another year.