Italy OKs decree to speed up EU funds spending amid concerns from economists

The Italian government of Prime Minister Giorgia Meloni has approved a decree that aims to ensure strategic coherence in the spending of all EU funds received by Italy, while economists remain cautious about its potential impact.

Italy’s challenges in making effective use of EU funds have attracted considerable attention from both public spending watchdogs and the media.

This latest decree introduces innovative measures, including a reward system for regions that demonstrate alignment with the objectives set. For example, to prevent overlaps, synergy and complementarity between EU recovery funds, EU structural funds, and EU Cohesion funds must be ensured.

“[T]he picture is not very edifying for the effectiveness of spending,” said Italy’s European Affairs Minister Raffaele Fitto on Tuesday after his cabinet approved the reform, referring to recent EU reports on the Cohesion Funds.

In particular, from 2021 to 2027, “commitments and expenditures are at almost zero, so the goal is to put €43 billion in European resources back into motion,” Fitto explained.

According to the minister, “the risk was that the funds would operate in conflict with each other,” and this reform serves as the “conclusive piece” to “better utilise these tools.”

The reform is in line with the ongoing debate at the European level on the future of cohesion policy, which is particularly relevant for Italy as one of the main recipients of the funds. Of the €43 billion in Cohesion Fund resources for the 2020-2027 plan, Italy has reportedly spent less than 1%.

The reform introduces incentives for regions to stick to the roadmap as a form of encouragement, while in cases of non-compliance, the reform allows for the use of replacement powers to address delays.

However, Marco Leonardi, professor of economics at the University of Milan, criticised Fitto’s choice, saying that “He did one thing right and two wrong things.”

“He did one thing right because revising cohesion policies is correct given Italy’s low expenditure,” but “he did two wrong things because he revised them by centralising all competencies, angering all regions and ministries after angering all municipalities by cutting their NRP (national recovery plan),” Leonardi explained.

“Ultimately, he angered everyone,” added Leonardi, who is also former head of economic planning at the prime minister’s office.

By centralising everything, “he may have done something that possibly violates European norms,” the economics professor continued, explaining that the partnership agreement is between the regions and Europe, while “the state has minimal involvement.”

“Now he’s intervening and saying that since cohesion funds must be coordinated with the NRP, and since he has exclusive competence over the NRP, perhaps he wants exclusive competence over cohesion funds too,” Leonardi added.

(Alessia Peretti | Euractiv.it)

Read more with Euractiv