MNI INTERVIEW: Italy Must Pay More For EU-Funded Projects

The Italian government must provide more assistance to companies struggling with soaring prices for raw materials and energy, or work on projects included in the country's European-Union-funded EUR220 billion National Recovery Plan will grind to a halt, threatening plans approved by Brussels, the head of the National Association of Builders told MNI.

Hundreds of projects including major new inter-city railway lines and a road between Milan and Genoa are in danger of stalling, ANCE President Gabriele Buia said in an interview, calling a government decree past last week to hold companies to their agreed work schedules for Recovery Plan projects is unworkable. Companies should be allowed to reduce their pace of work unless they receive more funds, he said.

“We are asking for an urgent meeting with Prime Minister [Mario] Draghi because the situation is unsustainable,” said Buia, noting that his members will be involved in EUR108 billion of Recovery Plan projects, which have been approved by Brussels before receiving EU funds.

The government is considering a fresh EUR7-8 billion package to mitigate the impact of the rise of energy prices on households and companies, as MNI has reported, which would come on top of another EUR20 billion of measures already announced. (See MNI: Italy Mulling EUR7-8 Bln Extra To Offset Energy-Sources) Members of Draghi’s ruling coalition are pushing for more funds, sources told MNI.

EUROPEAN SUMMIT

Building companies are seeing cost rises for a range of raw materials, and not just for energy, Buia said, adding that Russia’s war in Ukraine has removed any hope that the burst in inflation would fade quickly.

Government-run motorway company ANAS is now accepting bids from construction companies at prices 30% higher, but Buia noted that builders locked into older contracts are not entitled to any adjustment.

This week’s European Summit might lead to more money being awarded under the EUR800 billion NextGenerationEU scheme funding the national recovery plans, Buia said.

“I have been told that the NextGenEU will be addressed and it may result with more money for projects,” he said.

Sources say Italy wants the European Union to allow member states more fiscal leeway and to significantly boost its own spending to compensate for the economic impact of the war in Ukraine, while levying up to EUR200 billion in windfall taxes on energy companies. But so-called “frugal” northern states are likely to oppose such a move.

Prices for key supplies will remain high for months, and while natural gas prices could ease as the weather warms, this will not be sufficient for building companies, Buia said.