Italy is struggling to reach key important reform and investment targets agreed with the European Union in exchange for post-COVID payments, raising concerns about whether Rome would receive all of the money it is looking for, according to a government assessment.
The EU Recovery and Resilience Facility (RRF) will provide 191.5 billion euros ($205.56 billion) to Rome through 2026. However, Italy is slipping behind schedule in terms of spending the money it has already received as well as completing the “targets and milestones” that trigger the release of further funds.
Released on Thursday, the government report showed Italy spent just 25.74 billion euros of the almost 67 billion received so far, based on end-February data.
Adding to the challenge, Italy is currently reporting problems in implementing 118 – or 22% – of 527 targets set for reforms and investments that the euro zone’s third largest economy has promised to complete by 2026.
The delays are mainly due to an “unexpected significant increase” in the cost of raw materials and to supply bottlenecks, the report said, also mentioning “regulatory, administrative and management difficulties”.
Goals at risk include plans to develop 5G networks across the country as well as investments to reduce flood risk and promote renewable energy.
Prime Minister Giorgia Meloni, who took office last October, has said Russia’s invasion of Ukraine and high inflation mean that the original recovery plan must be revised.
A welter of micro projects is also snarling the system, with more than 76,000 projects worth up to 70,000 euros each, and around 28,000 in the 70,000-180,000 euro range, according to the report.
The right-wing administration is now renegotiating funding plans with the European Commission to drop projects that it will be unable to finalise by the current deadline and replace them with others that can be completed on time.
Italy also intends to clinch a deal with Brussels to shift part of the post-COVID funds to strategic energy projects eligible for the REPowerEU plan, which aims to wean the bloc off Russian gas and boost its green transition.