The investment and reform plan to make the country’s economy greener.
ROME: The European Commission said on Friday it had welcomed Italy’s proposals to revise its post-Covid recovery plan, adding investments and reforms to make the country’s economy greener in the REPowerEU programme.
The implementation of this plan is perceived by investors and rating agencies as a vital measure of Italy’s ability to cope with economic activity and control the country’s fragile public finances.
Prime Minister Giorgia Meloni said “the government has done work that it can be very proud of,” while her office said the updated plan would generate “another 21 billion euros” ($22. 9 billion) aimed at stimulating Italian growth.
The overall investment program now amounts to some 194. 4 billion euros in loans and grants and covers reforms (seven more than in the original plan) and 150 investments, the European Commission said in a statement.
First, Italy was set to raise €191. 5 billion by 2026 under the Recovery and Resilience Fund (RRF), the main component of the EU’s recovery fund.
However, Rome has fallen both in spending the tranches of cash coming in from Brussels and in achieving the policy goals of triggering the release of new payments.
As a result, Meloni began negotiations with Brussels to revive the plan by abandoning some of the projects and adding new ones.
The REPowerEU programme strengthens the recovery fund and is part of the bloc’s efforts to end dependence on Russian fossil fuels and boost the green transition.
The Italian bankruptcy of REPowerEU includes investments and reforms aimed basically at strengthening electricity and fuel networks, energy security and accelerating the production of renewable energy.
Some state-owned companies, such as fuel and power grid operators Snam and Terna, Italian app Enel and energy organization Eni, are expected to get part of the funds.
The revised recovery plan dedicates 25. 6% of its total allocation to supporting Italy’s virtual transition, up from 25. 1% previously.
EU leaders now have four weeks to approve the Commission’s assessment, which will allow Italy to get €1 billion in pre-financing from REPowerEU funds.
Italy has so far earned €85. 4 billion under the RRF and the government expects to secure further payments worth €16. 5 billion by the end of the year.
European Affairs Minister Raffaele Fitto said Italy would spend all the money it is entitled to, adding that projects removed from the post-Covid plan would not be ruled out yet and would be financed by separate EU funds.