Italy’s next government cannot expect Brussels to renegotiate the fundamentals of a €200bn EU-funded Covid-19 recovery plan warns EU economic commissioner. Rome must stick to its reform pledges.
Paolo Gentiloni, EU economic commissioner, said in an interview Italy must stick firmly to the reform pledges that Rome has made regardless of who wins the snap elections in September.
It is in the country’s best interests to reboot the country’s underperforming economy, Gentiloni added.
“You know the Latin pacta sunt servanda — agreements must be kept,” Gentiloni, a former Italian prime minister, said in an interview. “The implementation of this plan is essential.”
European officials might approve adjustments to member states’ recovery plans to reflect the EU’s energy crisis or rising costs, Gentiloni said. However, Brussels would not agree to “reshape the plans from scratch or to reshape them substantially”.
“If you fail to spend this money it would be a very, very bad signal for the European Union.”
“It is in the interests of Italy to deliver — it’s not about a dictat from Brussels,” said Gentiloni. “It is a big opportunity for the country and I hope whatever government we have will stay on track.”
Warning as investors watch political developments in Italy
Investors and EU capitals are watching political developments in Rome with bated breath. Following 18 months of political stability under Draghi, Italy is in limbo as parties start vying for control of the next government.
The markets fear the incoming administration might want to redraw key reform or investment commitments agreed by Draghi last year. Any changes could delay or jeopardise Italy’s receipt of billions worth of grants and loans.
Polls to date show the opposition party, far-right Brothers of Italy, could emerge as the largest party in the new parliament. Giorgia Meloni, the party’s leader, told La Stampa newspaper over the weekend she worried recovery funds were not being used in areas where “Italy is more competitive than others”.
The EU funds are part of an €800bn plan to use grants and loans to help member states recover from the covid pandemic. Italy’s programme involves cutting red tape, strengthening public administration, investing in health centres and boosting competition in sectors including transport and energy. None of which the average Italian on the street would deny is needed.
