MNI: Italy Fails To Meet NGEU June Deadline Targets - Sources

The Italian government has failed to meet the June 30 deadline for NextGenEU 27 targets and milestones and has not yet requested the fourth tranche of EUR 16 billion from Brussels, Italian and EU sources told MNI.

A spokesperson told MNI that the Italian executive is finalizing the compilation of the last targets and milestones and that it will soon send the payment request to unlock the EU funds.

The biannual Italian deadlines – end-June and end-December -- were set by the Italian government in accordance with the European Commission, although missing them does not necessarily lead to sanction or reduction in funds.

The rules of the RRF facility establish that EU member states can submit a maximum of two payment requests per year once a set of targets, milestones and reforms have been reached.

However, a delay in the June deadline could create difficulties in hitting the December date, jeopardising that month’s payment request, slowing the flow of money on which the national recovery plan was built.

Italy has not missed any deadlines since the NGEU started functioning in 2021, despite some running close to the clock and with targets often ticked as completed in what was considered a generous manner. (MNI: Italy Pushes Back Date For Revamped Recovery Plan-Sources)

TIMING CHANGES

Going forward, the plan could see slower fund disbursements than previous tranches as Italy undergoes an overhaul of its plan that could see a reduced number of projects, concentrating the use funds, with some deadlines amended, one of the sources said.

Italy, in line with other member states, have until August 31 to present the addendum of the plan that could also see changes on timings for payment requests, making the current system outdated, the source added.

Raffaele Fitto, Italy’s European Affairs minister -- who holds direct responsibility for the plan – has said publicly that Rome will send its proposal to Brussels in good time for appraisal.

Italy is still waiting for the disbursement of the third payment, one tied to the December 2022 deadline, after the European Commission asked for clarifications in April on certain investment projects. In early May, Finance minister Giancarlo Giorgetti said the EUR 19 billion tranche would arrive in “a matter of days” and Brussels also expressed that it was close to releasing the funds (MNI: EU Nears Paying Italy Delayed EUR19Bln - Officials)

Italian press reports suggested Brussels offered Italy a payment of almost all the EUR19 billion, but Rome rejected it, concerned over reputational risks. The delay in the third payment pushed Italy’s deficit higher according to the latest available data, but it won’t trigger a change in the Treasury’s overall numbers, one source said.