MNI: Italy On Target For NextGenEU Cash After Sprint-Officials

The Italian government is very likely to achieve all 51 of this year’s targets required for a EUR20 billion second tranche of the EUR190 billion allocated to the country under Europe’s NextGenEU Covid recovery fund, a finance ministry source told MNI.

The path towards receiving the disbursement in the first half of 2022 was cleared after Prime Minister Mario Draghi’s government drafted in officials from other departments for a two-month sprint to overcome delays that had accumulated by the summer, the source told MNI.

Italy had reached 42 out of its 51 targets by Dec. 16, and many of the remaining objectives will be included in the budget law to be approved in the coming days, putting the country on course for meeting its Dec. 31 target deadlines, the source said. The European Commission will then evaluate a report by the Italian government on its progress before member states provide final approval for unlocking the funds, the source said, noting that Spain obtained the green light two weeks after handing in its own report to the Commission.

INFRASTRUCTURE MOST CHALLENGING

Officials had become seriously concerned by October that Italy was falling behind its NextGenEU schedule (see MNI SOURCES: Italy Struggles To Organise Projects For EU Cash), and that it was also failing to approve infrastructure projects on which to spend the EU cash, especially in the south.

Preparing public works has proven more challenging than targets for passing legislation, such as reforms of the courts and public administration, several officials said. Parliamentary committees have helped by modifying projects to fit them within the NextGenEU framework, a budget committee source told MNI.

Moving into 2022, Italy will face fresh challenging objectives, including a tax reform, initial work on which has already exposed deep disagreements between the parties of Draghi’s coalition. Other requirements to implement already-legislated reforms may also prove difficult in practice, sources said.

As the European money comes in, Italy also needs to improve on its poor record of spending such funds, a source at the centre-left Democratic Party told MNI.