MNI: Italy Seeks Extensions To NextGenEU Deadlines

(Corrects typos in second paragraph)

The Italian government has informally asked European Commission officials whether it would be possible to extend some deadlines for targets agreed under the NextGenerationEU aid programme, including those coming due this month, sources familiar with the matter told MNI.

While the European officials have not dismissed the idea of slightly extending or of loosening the interpretation of this month’s deadlines, they have been more resistant to Italy’s desire to push back targets for 2026, the sources said. The Italian government wants more time for infrastructure and construction projects slated for completion in 2025 and 2026, arguing that inflation and soaring raw material costs are producing unavoidable delays.

Meetings continue with the EC officials, who are on a routine visit to Rome to check on progress with the National Recovery Plan targets agreed as a condition for disembursing NextGenEU funds. The officials are also analysing a request for changes to National Recovery Plan projects so that they better respond to the energy crisis, following a request from Prime Minister Giorgia Meloni during a trip to Brussels last month.

Italy should still receive its next EUR19 billion NextGenEU payment even if not all 55 milestones and targets under the Recovery Plan have been reached, so long as sufficient progress has been made, two Italian government sources said. One possibility might be to declare that targets for project tenders have been met even if winners have yet to be declared, they said.

DELAY NO MORE THAN A MONTH

Italy’s new government has had to deal with delays inherited from former Prime Minister Mario Draghi, said a source close to Meloni, while a Finance Ministry source said the incoming administration had needed several weeks to get on top of the programme. The Dec 31 targets should only be delayed by a month at most, said one of the sources, adding: “they are telling us that a month should not be a problem.”

One complication is that member states are only allowed to make two NextGenEU payment requests per year, so if Italy’s request is made in January it would limit the amount it could receive in 2023, sources said. (See MNI: Italy Seeks To Cover EUR6.2 Bln Shortfall In Budget Plan)

The ongoing discussions are focussed on finding a way to solve this problem, and the government is also preparing an ad hoc decree that could speed up some of the delayed projects and reforms in what remains of the year.

While the arrival of a new government has slowed things down, it is still surprising to see it talking about extending this year’s deadlines, a member of the technical committee appointed by Draghi to oversee the Recovery Plan told MNI.

“I was expecting a formal request in 2023,” the committee member said, noting that if the government is going to ask for a postponement of targets it has still to make a formal written request. Other countries have also faced higher raw material costs as they push through NextGenEU projects, but none has complained as much as Italy, the committee member noted.

The possible delays have also highlighted tensions within Italy’s right-wing coalition, with European Affairs Minister Raffaele Fitto, who has special responsibility for the Recovery Plan, pushing for an extension to deadlines, while Finance Minister Giancarlo Giorgetti would prefer to meet targets as set, a Finance Ministry source said.