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The European Commission on Friday approved Italy’s spending plans and reforms linked to its €194bn share of the EU post-pandemic recovery fund, in a boost for Prime Minister Giorgia Meloni’s right-wing government.
The agreement paves the way for Brussels to approve Italy’s next €16.5bn tranche, which officials in Rome say they hope to receive by the end of the year.
Overall, Italy is set to be the largest beneficiary of the €800bn recovery fund, an initiative to modernise the economy with debt jointly guaranteed by EU member states. Rome has already received €85.4bn under the programme, which runs until 2026.
Pending the approval of EU finance ministers, the changes represent a significant achievement for Meloni, who had raised objections to parts of the spending plan inherited from the previous government led by Mario Draghi. She argued that a spike in energy and raw materials costs after Russia’s invasion of Ukraine in 2022 had complicated its implementation.
Meloni also proposed changes to ensure the funds were directed to more strategic areas, including energy infrastructure — and the cancellation of €16bn in public investment projects deemed impossible to complete on time or not strategically relevant. The agreed changes include reforms in areas such as justice, public procurement, and competition law.
The overhaul will also include €6.3bn in tax credits for businesses to assist them with the green and digital transition, and €2bn to modernise the agriculture and food processing sectors.
With the revisions, more resources will now be deployed on strengthening energy infrastructure and improving energy efficiency, buying cleaner trains and other environmental measures. The revised plan also allocates an additional €2bn to strengthen water infrastructure.
“Today we have a confirmation that we have done a job of which the government can be really proud,” Meloni said in a statement after receiving the green light from Brussels. “We did what we promised we would do.”
In its statement, the commission said the changes to the original programme were justified by high inflation, supply chain disruptions after Russia’s invasion of Ukraine and other unforeseen difficulties in implementation.
The revised plan also cuts Italy’s target for creating new childcare facilities, to a commitment to create care capacity for 150,000 young children, compared to an original target of 260,000.
Brussels’ positive assessment for Rome’s recovery plan overhaul comes just days after it also gave the go-ahead for first payout to Hungary and Poland for funds that had been frozen over rule of law concerns.
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