MNI: Italy Makes NextGenEU Targets Easier - Gov't Sources
MNI (ROME) - The Italian government is adjusting its targets and milestones for the NextGenerationEU programme, making them easier in order to secure swift approval for the remaining tranches of its EUR191 billion allocation, government and coalition sources told MNI.
Changes include setting less stringent targets for planned investments and introducing longer deadlines, the sources said.
Italy, along with Croatia, is one of the few countries to have received a fifth payment under the NGEU programme. However, it is also the only country to have amended and updated its plan four times, the sources noted.
The European Commission has so far approved these revisions, while Italian officials have consistently touted every payment as evidence of the plan's success and compliance with EU requirements.
Despite these achievements, concerns are mounting even among some Italian government officials that the country is failing to use NGEU funds to enhance long-term growth potential, one source said.
One government official minimised the changes, insisting that the latter stages of NGEU mainly involved decisions on how to spend money rather than the difficult reforms required for its initial tranches.
However, a source monitoring the programme dismissed these arguments.
“These constant updates and changes to the plan reflect significant difficulties in achieving the original goals,” he said, adding that the trend of loosening standards began around a year ago, accompanied by a decline in transparency and public information about the programme’s progress. (See MNI: Italy To Overshoot 2024 Fiscal Target - Sources)
SHORT-TERM STIMULUS
NGEU risks becoming a short-term economic stimulus, another source said.
“The Recovery Plan, with the Superbonus scheme, has been the main driver of Italian growth in recent years. When it ends, we could regress,” the source warned, referring to a scheme offering fiscal incentives for home renovations and warning
The government has also scaled back the level of detail provided by the official body responsible for overseeing the plan, coverage of which has largely disappeared from Italian media, appearing only when Brussels announces approvals or disbursements of funds.
Asked about the management of the Italian plan, the European Commission told MNI that its role is not to track the flow of funds but to verify implementation of milestones and targets on receipt of a disbursement request.
But a source close to the issue said the criticism reflected “legitimate concerns”.
“The problem with Italy is not compliance with milestones and targets, but the flow of money to the final beneficiaries, where there are large delays.”
Italy’s NGEU programme has been further complicated by political shifts, with three different governments and three separate officials overseeing it from application to implementation.
The plan was initially negotiated under former Prime Minister Giuseppe Conte, then his successor Mario Draghi began its implementation. Responsibility for NGEU under Prime Minister Giorgia Meloni was initially assigned to former European Affairs Minister Raffaele Fitto, before he moved to the European Commission. Now it falls to Tommaso Foti, who has said it needs to be changed.
Any changes to the plan under Article 21 of the Recovery and Resilience Facility (RRF) rules require approval from both the European Commission and the European Council. However, Rome is optimistic about smooth approvals, given Fitto’s new role as the Commission’s Executive Vice President for Cohesion and Reforms, where he is tasked with ensuring Member States deliver on their recovery plans.
The stability of Meloni’s government, at a time when both France and Germany face political wobbles, is also expected to strengthen Italy’s position in securing ongoing support for the programme, a government source added.