European Commission releases third tranche of recovery plan funds to Italy

The European Commission has given its approval on Friday to release the third tranche of funds allocated as part of Italy's recovery plan, which had been frozen for months pending clarifications from Rome.

Furthermore, the Commission has also approved the changes proposed by the Georgian government, led by Giorgia Meloni, regarding the fourth tranche, which will be disbursed this year.

Commission President Ursula von der Leyen stated in a statement, "Italy has made significant progress in implementing the reforms and investments" outlined in the recovery plan.

In response, Meloni expressed her satisfaction with the decision, stating, "I am very pleased with the Commission's decision today to release the third tranche of the recovery plan and approve the changes proposed by the government for the fourth tranche."

She added, "It is a fantastic result that will allow Italy to receive the expected €35 billion in 2023."

Brussels had suspended the disbursement of the third installment, worth €19 billion, to Italy, awaiting clarifications on how the funds will be spent and the planned course of action to achieve the objectives.

With the amendments proposed by Rome, the third tranche will be reduced to €18.5 billion, while the value of the fourth tranche will increase from €16 billion to €16.5 billion.

Consequently, Rome has foregone €500 million from the third tranche, which will be refunded in the fourth tranche, after the Italian government postponed the construction of student dormitories and the creation of 7,500 additional beds.

Italy, as one of the main beneficiaries of the European post-pandemic plan, is expected to receive €191.5 billion by 2026. However, the country has been lagging in implementing the required reforms in exchange for the assistance.

Rome is also seeking other changes to its recovery plan, proposing 144 amendments out of 349 projects that still need to be implemented under this plan by 2026.

These 144 amendments primarily concern administrative and technical aspects, but nine of them, totaling €15.9 billion; have been simply removed from the recovery plan. Rome believes that it does not have the opportunity to complete these projects on time and prefers to allocate these funds to other meaningful projects.

The opposition has quickly criticized the withdrawal of these reform provisions, one of which allocated €1.3 billion to secure Italian territory against hydrological and geological risks, especially after the peninsula witnessed several floods in recent months, causing billions of euros in damages.

The Democratic Party (center-left) condemned what it considered an "insult to the country," while the Five Star Movement (formerly anti-establishment) criticized the government's policy of "climate denial."

Italian Minister for European Affairs, Raffaele Fitto, who oversees the implementation of the recovery plan, affirmed that the affected projects will be carried out with "other funds," clarifying that the government "has not canceled any funding or made any cuts but has merely reorganized" the funds.




AFP