Italy expects 19 bln euros of EU post-pandemic funds in May, minister says

To gain some flexibility, Rome is in talks with Brussels to replace some projects from its original recovery plan, which it now realises it cannot complete by a 2026 deadline, government officials have previously said. These would be replaced with less ambitious programmes that can be completed on time, while the original ones could be financed from separate European Union funds that can be spent until 2029, the sources said.

Italy has fulfilled the policy requirements to unlock a new 19-billion-euro ($20.25 billion) tranche of European Union post-pandemic funds in May, Economy Minister Giancarlo Giorgetti said on Tuesday. The government has so far secured almost 67 billion euros of the roughly 200 billion euros it is due through 2026.

Italy is the single-largest beneficiary of the EU post-COVID Recovery Fund, and meeting the so-called "targets and milestones" in its recovery plan agreed with Brussels is one of the main challenges for Giorgia Meloni's recently-elected rightist government. "We have achieved so far all the objectives agreed with the European Commission," Giorgetti told a parliamentary hearing.

"At the moment the EU is evaluating a third payment worth 19 billion euros which we expect to get in May," he said. The money is related to the targets and milestones achieved in the second half of last year and was originally expected to be approved by the end of February, according to the timeline set out by the Commission.

Italy is eligible for a further 34 billion euros in 2023, split into two tranches, provided it can meet all 96 objectives set for this year. Giorgetti said Italy shared its difficulties in meeting its deadlines with several other Recovery Fund recipients.

"Talk of going beyond 2026 should not be taboo," he said, citing the economic and financial upheaval caused by Russia's invasion of Ukraine and record high raw material prices. To gain some flexibility, Rome is in talks with Brussels to replace some projects from its original recovery plan, which it now realises it cannot complete by a 2026 deadline, government officials have previously said.

These would be replaced with less ambitious programmes that can be completed on time, while the original ones could be financed from separate European Union funds that can be spent until 2029, the sources said. That would potentially give the government up to three more years to complete its overall investment programme without formally missing the 2026 deadline.

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