MNI EXCLUSIVE: Italy Covid Recovery Seen Plan Passed By March

Italy is confident of securing approval by early March for a Recovery Plan required to access tens of billions of euros of emergency European Covid funds despite the government's near collapse this week, and parliamentarians from the small party behind the attempt to oust Prime Minister Giuseppe Conte told MNI they will support this and other key economic measures.

As Italian media reports President Sergio Matarella has given Conte two weeks to secure a new majority after he survived confidence votes in both houses of parliament, talks with the small centre-left Italia Viva party, at the heart of the recent political crisis, are set to begin next week, legislators working on the Recovery Plan told MNI.

Changes requested by eurozone finance ministers have been accepted by the Italian government, Finance Ministry sources said, and legislators expressed confidence that the plan should be ratified within weeks, to be sent to Brussels in order to unlock the European funds.

Italia Viva will push the government to accept the modifications proposed by the finance ministers, including a reduction in proposed subsidies coupled with increases for investments, said one of the party's parliamentarians, Mauro Barba, who sits on a legislative committee due to consider the plan before returning it to the executive in the next few days. The party led by former prime minister Matteo Renzi wants spending to focus on building projects for the future rather than just responding to the immediate demands of the Covid crisis, he said.

IMPROVING THE PLAN

"We will work to approve the plan on time and the government can count on our support for any other economic measures if they are appropriate," Barba told MNI.

It was Renzi's concerns over the extent of Conte's personal control over the Recovery Plan which led him to withdraw his party's ministers from the government, almost toppling the coalition government.

Italy's undersecretary for European affairs, Laura Agea, told MNI that the government would be open to suggestions from Italia Viva to improve the Recovery Plan, particularly in areas such as education, the labour market and transition to a green economy. But projects should be limited to the 2021-26 period, she said, noting that Italia Viva wanted a longer window.

The government is also committed to achieving parliamentary approval of measures to boost the European Union's own resources, in line with timelines in other member states, Agea said. Officials in Brussels have told MNI they fear that slow ratification of the own resources measure within the bloc could delay its EUR672.5 billion Recovery and Resilience Facility.

Agea told MNI that member states should coordinate between each other as they prepare to ratify the measure.

"This route should be undertaken in a common way, so all states share the same direction," she said.

RESHUFFLE

Despite coming to the brink of collapse, the government will continue to implement its economic plans, a senior official at Conte's office told MNI, adding that it hoped to boost its majority by attracting defectors from Italia Viva and independents.

The prime minister now faces pressure to reshuffle his cabinet following the departure of ministers from Renzi's party, said sources from the governing coalition's two biggest parties, the populist Five-Star Movement and the centre-left Democratic Party, adding that this could lead to more sharing of power. For the moment, Conte is only seeking to fill the portfolios for agriculture and the family left vacant by Italia Viva, and is seeking candidates calculated to bolster the support of independents, sources said.