MNI: Italy Pushes Back Date For Revamped Recovery Plan-Sources

The Italian government is finding it harder than expected to revamp the National Recovery Plan required as a condition for EUR190 billion in NextGenerationEU aid, and will only send a proposal for approval by Brussels by some time close to the Aug. 31 deadline as opposed to in the spring as originally hoped, two governing coalition sources told MNI.

Rome expressed its intention to modify its Plan in late 2022 in order to take account of the effect of higher energy and raw material prices on projects paid for by NextGenEU money. Recovery Plans throughout the EU are also being updated to take account of the RepowerEU plan for energy independence from Russia.

While Brussels indicated it would not grant an Italian request to extend the 2026 time limit during which the money must be spent, it has given the green light for a reduction in the number of projects. (See MNI: Spain, Italy Discuss Joint Push For NGEU Extension-Source).

Meanwhile, Italy’s third EUR19 billion NextGenEU tranche, whose disbursement has been delayed by a month until April 30 after the European Commission asked for more time to check that Italy was meeting targets on three projects agreed under the plan, should be paid on schedule, sources said, adding that meetings with European officials on the matter had gone well.

Italy will also easily be able to meet the June 30 deadline to conclude the next round of NextGenEU targets and request a fourth tranche, government sources said. But Luca Dal Poggetto, from the Open PNRR organisation which monitors implementation of the plan, has previously told MNI that this would be difficult without changes to the targets.

MINISTERS DEFENDING THEIR PATCHES

European Affairs Minister Raffaele Fitto is meeting significant resistance from other government ministers in talks over which projects to be eliminated or cut back in a revamped Recovery Plan, sources said. Fitto and Prime Minister Giorgia Meloni were given overarching control of the Plan at the expense of Economy Minister Giancarlo Giorgetti two months ago, in a measure ratified by parliament last week.

Italy will have to update Brussels on how much money it will borrow for each project, aiming to keep the total as close to the original EUR190 billion as possible. Fitto also aims to swap projects between the programme and EU cohesion funding, which has longer deadlines.

“It’s the work of a craftsman, as it’s not easy to match the numbers,” one of the sources said. Rome says it must overhaul a plan conceived before the war in Ukraine and that investment priorities have changed.

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.

Italy is also in talks with big energy state companies Eni, Enel and Snam to include RepowerEU in the updated Plan. Strategically important projects will take priority, possibly including plans by Snam for a pipeline to boost the capacity to transport gas from southern Italy to EU countries in the north.

The European Commission has already assigned Italy EUR2.7 billion for RepowerEU, but the government needs to top them up and will also seek cohesion funds, sources said.

Fitto is expected to provide an update on his work on the Recovery Plan in parliament on Wednesday together with a detailed report in early May.