Italy spent around 45% of EU COVID recovery cash received so far, report shows

By Thomson Reuters Feb 22, 2024 | 7:11 AM

By Giuseppe Fonte

ROME (Reuters) – Italy has spent around 45% of the almost 102 billion euros ($110.7 billion) it has received so far from European Union COVID-19 recovery funds, short of a target set in 2022, a report from its government showed on Thursday.

Implementation of the plan is seen by investors and rating agencies as an important measure of Italy’s ability to boost its sluggish economy and keep in check the country’s creaking public finances.

The document said Rome spent 45.65 billion euros between 2021 and 2023 of EU funds disbursed to support the economic recovery from the coronavirus pandemic, below a previous target of some 61 billion euros officially set in late 2022.

However, Prime Minister Giorgia Meloni expressed satisfaction at Italy’s progress.

“The work isn’t over, we still have a lot to do, but the many goals achieved so far make us proud and encourage us to do more and more,” she said in a speech released by her office.

By 2026 Rome is due to receive 194.4 billion euros from the bloc’s so-called Recovery and Resilience Facility (RRF), more than any other state in absolute terms.

Rome said in the report that 24.5 billion euros had been invested between 2021 and 2022 mainly under the previous government led by Mario Draghi, with an additional 21.2 billion under Meloni, whose administration took office in October 2022.

Italy has officially estimated that the EU funds would boost gross domestic product by 3.4 percentage points by 2026.

Nevertheless, according to Brussels’ “mid-term evaluation” of the RRF released on Wednesday, under a best-case scenario Italian GDP in 2026 will be just over 2.5 percentage points higher than it would have been without the EU transfers.

Meloni last year clinched a deal with EU authorities to revise and revamp its post-COVID recovery plan, after having fallen behind schedule in meeting policy targets and milestones that are needed to unlock the money.

While Rome is still waiting for Brussels to disburse 10.6 billion euros related to an end-2023 fifth instalment, the revised programme stated that Italy should meet 113 goals to receive a further 28.8 billion this year.

The last instalment of 28.4 billion is bound to the completion of 173 goals by the first half of 2026.

($1 = 0.9215 euros)

(Reporting by Giuseppe Fonte; Editing by Crispian Balmer and Jan Harvey)