Italy gets EU backing to revise its post-COVID recovery plan

Implementation of the plan is seen by investors and rating agencies as a key measure of Italy's ability to support economic activity and keep in check the country's creaking public finances. Prime Minister Giorgia Meloni said "the government has done a job it can be very proud," while her office said the updated plan would result in "an additional 21 billion euros" ($22.90 billion) devoted to boosting Italy's growth.

The European Commission said on Friday it had given a positive assessment of Italy's proposals to revise its post-COVID recovery plan, including investments and reforms to make the country's economy greener under the REPowerEU scheme. Implementation of the plan is seen by investors and rating agencies as a key measure of Italy's ability to support economic activity and keep in check the country's creaking public finances.

Prime Minister Giorgia Meloni said "the government has done a job it can be very proud," while her office said the updated plan would result in "an additional 21 billion euros" ($22.90 billion) devoted to boosting Italy's growth. The overall investment programme is now worth some 194.4 billion euros in loans and grants and covers 66 reforms - seven more than in the original plan - and 150 investments, the European Commission said in a statement.

Italy was originally due to receive 191.5 billion euros through 2026 under the Recovery and Resilience Facility (RRF), the main component of the European recovery fund. However, Rome fell behind schedule both in spending the tranches of cash that arrived from Brussels, and in meeting policy targets to trigger the release of fresh payments.

As a result, Meloni launched talks with Brussels to revive the plan by shelving some of the original projects and adding new ones. The REPowerEU scheme strengthens the recovery fund and is part of the bloc's efforts to end dependence on Russian fossil fuels and accelerate the green transition.

Italy's REPowerEU chapter includes 12 new investments mainly focused on strengthening electricity networks and energy security, and speeding up renewable energy production. Other measures will go to reduce energy demand, increase energy efficiency and strengthen the skills needed for the green transition, the Commission said.

The revised recovery plan also devotes 25.6% of its total allocation to support Italy's digital transition, up from 25.1%. EU leaders now have four weeks to endorse the Commission's assessment, allowing Italy to receive half a billion euros in pre-financing of the REPowerEU funds.

Italy has so far received 85.4 billion euros under the RRF and is confident of receiving another instalment worth 16.5 billion by the end of the year.