MNI: Italy Tells Brussels Will Miss June NGEU Deadlines-Source

The Italian government has told the European Commission that it will fail to make the June 30 deadline for achieving some of 27 targets to be eligible for a EUR16 billion aide tranche under the NextGenerationEU programme, an Italian government source told MNI.

Rome has decided to inform Brussels in advance so both parties have to time to seek solutions to facilitate payment of the fourth tranche of a total EUR191 billion in loans and grants allocated to Italy under the programme, the source said.

The third, EUR19 billion tranche is already delayed, after Brussels asked for an additional month to check whether Italy had met its objectives, though Rome is confident disbursement will be approved in the next few days, the source said.

Italy is currently negotiating with the Commission to seek permission for significant adjustments to the National Recovery Plan setting out targets and projects for NextGenEU, arguing that unexpectedly high inflation and uncertainty over energy supplies in the wake of the Russian invasion of Ukraine mean the old plan is outdated. (See: MNI: Italy Pushes Back Date For Revamped Recovery Plan-Sources)

These talks will now be key to finding a way for Italy to receive the fourth NextGenEU tranche, a source not linked to the government with knowledge of the Plan told MNI.

Rome has told Brussels that its problems for meeting the June 30 targets can be overcome within the lifetime of NextGenEU, which is due to run until 2026. The response so far has been constructive, the government source said.

“We want to give guarantees that the projects would be completed by 2026,” he added.

MOUNTING PROBLEMS

Italy is facing mounting problems making Recovery Plan targets, with some objectives dependent on first achieving others which are already delayed.

The European Commission has indicated it would not grant an Italian request to extend the 2026 time limit for spending NextGenEU money must be spent but it is considering an Italian request to shift some of the projects out of the programme and refund them with longer-term EU cohesion funds. (See MNI: Spain, Italy Discuss Joint Push For NGEU Extension-Source)

Unlike most other countries, Rome requested the maximum available amount under NextGenEU, though some Italian officials want to take further advantage of the programme’s low interest rates by asking for more, as Spain has done. In Italy's case, this would exceed Brussels’ limits, and others in government are more cautious about further indebtedness anyway.

An Italian government spokesperson declined to comment, but referred MNI to declarations by European Affairs Minister Raffaele Fitto calling for adjustments to the National Recovery Plan.

A European Commission spokesperson also declined to comment on possible delays to Italy’s fourth NextGenEU payout.

“Public commentary can come only after all relevant milestones and targets linked to a specific payment request have been completed and the assessment of the payment request has been finalised,” the European spokesperson said.