Italy repairs €200 billion plan to EU COVID recovery fund

Italy is overhauling how it will spend €200bn of the EU’s COVID-19 recovery fund as it tries to avoid squandering cash on useless projects, or worse, failing to spend the money on time lives.

A senior Italian official told the Financial Times, “It is fundamental to use this money properly.” “This is an important opportunity for Europe and for our country.”

After winning the largest share of EU funds to reactivate economies post-Covid, Italy has struggled to find eligible projects it can execute by a June 2026 deadline.

The official said Rome planned to present a revised plan to the EU by the end of June after already bidding €148.5mn for stadium projects in Florence and Venice following objections from Brussels.

Italy’s current plan includes investing €25bn in railway lines, €15bn in new health clinics and other medical infrastructure, €4.3bn in replacing leaky water pipes and developing water storage capacity, and building nurseries, schools involving billions of investments to modernize and rejuvenate urban decay. regions.

But most of the money is also being directed to Italian municipalities – some of which seem to have particular views about what to spend in the name of urban renewal and social inclusion.

Members of Meloni’s government have privately bemoaned the quality of proposed municipal projects, many of which may now be reconsidered.

In Foligno, a small town in central Italy with 55,000 residents, mayor Stefano Zuccarini plans to use €1mn to build a new solar-powered health facility for stray dogs and cats.

“We will ensure health and a high quality of life for animals,” said Zuccarini, whose 2019 election campaign platform included pledges on animal welfare and protection. “We want to treat our animals well – making sure they have a good life and proper care.”

The Sicilian town of Marsala wants to spend €800,000 to finish a horse-racing track that was started 30 years ago and never completed. Macerata in central Italy, which lies just 315 meters above sea level, considered building an artificial ski slope, but abandoned the idea after local protests. Cavariglia in Tuscany has allocated €4mn for the renovation of a local golf course.

Smaller villages with a few hundred residents are also set to receive funding for local initiatives. The southern town of Panettiere plans to use €125,000 for a new Christmas nativity scene, while the northern mountain village of Exile – with a population of 242 – is set to receive €200,000 to renovate a grappa museum. .

Italy’s share of grants and loans from the recovery fund should be used to strengthen its infrastructure, reduce social inequality and enhance the country’s long-term growth trajectory to make its debt more sustainable.

But potential ruin isn’t Rome’s only concern. Rafael Fito, the cabinet minister overseeing the programme, has warned that Italy will struggle to use up all its allocated funds by the June 2026 deadline without major changes. As an example, he noted that Italy would likely miss the June 30 target to complete a tender for new childcare facilities worth €4bn.

Italy’s Court of Auditors, which is independently monitoring the plan’s execution, also warned last week that the country was lagging behind on other key targets due for June 30, including the rollout of electric vehicle charging stations, Thereby increasing the “real risk” of Italy. on some funding.

“It is clear today that the plan needs to be revised,” Fito told Italy’s Senate last month. “It is necessary to immediately understand which of these projects can be improved and which will not be achieved.”

With its tangled bureaucracy and weak local administrative capacity, Italy has historically struggled to access money from Brussels, spending just 34 per cent of the €126bn in EU cohesion funds available from 2014 to 2020.

But Fito doesn’t want to repeat that performance. “Our goal is very clear: spend the entire program money,” he told the Senate. “To reach this objective, it is essential to find and fix problems today, so that tomorrow . . . we can spend and improve rapidly.

While opposition parties have criticized Meloni’s government, some analysts have said that the plan was flawed from the start.

“It was not well designed,” said Luciano Monti, a professor at the University of Louis who has studied the plan. “He had this idea of ​​building and building things. He put a lot of money into hard infrastructure. No one would be able to spend all this money in such a short period of time just for physical work.”

Italy is overhauling how it will spend €200bn of the EU’s COVID-19 recovery fund as it tries to avoid squandering cash on useless projects, or worse, failing to spend the money on time lives.

A senior Italian official told the Financial Times, “It is fundamental to use this money properly.” “This is an important opportunity for Europe and for our country.”

After winning the largest share of EU funds to reactivate economies post-Covid, Italy has struggled to find eligible projects it can execute by a June 2026 deadline.

The official said Rome planned to present a revised plan to the EU by the end of June after already bidding €148.5mn for stadium projects in Florence and Venice following objections from Brussels.

Italy’s current plan includes investing €25bn in railway lines, €15bn in new health clinics and other medical infrastructure, €4.3bn in replacing leaky water pipes and developing water storage capacity, and building nurseries, schools involving billions of investments to modernize and rejuvenate urban decay. regions.

But most of the money is also being directed to Italian municipalities – some of which seem to have particular views about what to spend in the name of urban renewal and social inclusion.

Members of Meloni’s government have privately bemoaned the quality of proposed municipal projects, many of which may now be reconsidered.

In Foligno, a small town in central Italy with 55,000 residents, mayor Stefano Zuccarini plans to use €1mn to build a new solar-powered health facility for stray dogs and cats.

“We will ensure health and a high quality of life for animals,” said Zuccarini, whose 2019 election campaign platform included pledges on animal welfare and protection. “We want to treat our animals well – making sure they have a good life and proper care.”

The Sicilian town of Marsala wants to spend €800,000 to finish a horse-racing track that was started 30 years ago and never completed. Macerata in central Italy, which lies just 315 meters above sea level, considered building an artificial ski slope, but abandoned the idea after local protests. Cavariglia in Tuscany has allocated €4mn for the renovation of a local golf course.

Smaller villages with a few hundred residents are also set to receive funding for local initiatives. The southern town of Panettiere plans to use €125,000 for a new Christmas nativity scene, while the northern mountain village of Exile – with a population of 242 – is set to receive €200,000 to renovate a grappa museum. .

Italy’s share of grants and loans from the recovery fund should be used to strengthen its infrastructure, reduce social inequality and enhance the country’s long-term growth trajectory to make its debt more sustainable.

But potential ruin isn’t Rome’s only concern. Rafael Fito, the cabinet minister overseeing the programme, has warned that Italy will struggle to use up all its allocated funds by the June 2026 deadline without major changes. As an example, he noted that Italy would likely miss the June 30 target to complete a tender for new childcare facilities worth €4bn.

Italy’s Court of Auditors, which is independently monitoring the plan’s execution, also warned last week that the country was lagging behind on other key targets due for June 30, including the rollout of electric vehicle charging stations, Thereby increasing the “real risk” of Italy. on some funding.

“It is clear today that the plan needs to be revised,” Fito told Italy’s Senate last month. “It is necessary to immediately understand which of these projects can be improved and which will not be achieved.”

With its tangled bureaucracy and weak local administrative capacity, Italy has historically struggled to access money from Brussels, spending just 34 per cent of the €126bn in EU cohesion funds available from 2014 to 2020.

But Fito doesn’t want to repeat that performance. “Our goal is very clear: spend the entire program money,” he told the Senate. “To reach this objective, it is essential to find and fix problems today, so that tomorrow . . . we can spend and improve rapidly.

While opposition parties have criticized Meloni’s government, some analysts have said that the plan was flawed from the start.

“It was not well designed,” said Luciano Monti, a professor at the University of Louis who has studied the plan. “He had this idea of ​​building and building things. He put a lot of money into hard infrastructure. No one would be able to spend all this money in such a short period of time just for physical work.”