ROME: Italian Prime Minister Mario Draghi said Tuesday he would proceed with reforms at “maximum speed” after the European Union gave the green light to billions of euros in post-pandemic recovery funds. Italy was one of the European countries hardest hit by coronavirus and will receive the biggest share of the EU’s 750-billion-euro ($900 billion) recovery plan agreed last year.
During a visit to Rome, European Commission chief Ursula von der Leyen announced its support for Italy’s “ambitious” and “foresighted” plan to spend 191.5 billion euros in EU grants and loans between now and 2026. At a joint press conference, Draghi emphasised the need to spend the money well, adding that key reforms linked to the investments, notably of Italy’s snail-paced justice system, would “proceed at maximum speed”.
“The Italian government and all of us have a responsibility towards the rest of the European countries, towards the European citizens who have paid taxes to finance our national plan,” he said. Von Der Leyen is on a tour of EU member states to launch the recovery fund, agreed after a historic decision to pool debt. Amid concerns from some of the EU’s “frugal” northern members about subsidising spending in what they see as the less fiscally virtuous south, the investment is closely tied to reform.
“We were always aware of the fact that it will need a combination of reforms and investment to boost the economy when we get out of the (coronavirus) crisis, to really leapfrog forward to modernising and reviving our economy,” Von der Leyen said. The first instalment of Italy’s EU funds, worth almost 25 billion euros, could arrive before the end of July.
Eurozone’s third economy
The two leaders were speaking at Rome’s legendary Cinecitta film studios, which will benefit from the EU funds to the tune of more than 300 million euros. Known as “Hollywood on the Tiber” in the 1950s for hosting US blockbusters like “Quo Vadis” and “Ben-Hur”, it was second home to legendary Italian filmmaker Federico Fellini and remains one of Europe’s largest studios.
At 222 billion euros counting in additional funds from Italy, Draghi’s recovery plan focuses on digitalisation, support for women and young people and the transition to a greener economy. A further 26 billion euros has been earmarked for specific works up until 2032, including high-speed rail.
Italy’s economy-the third largest in the eurozone-shrank by a staggering 8.9 percent in 2020 but the central bank has forecast growth of nearly five percent this year. However, public debt is expected to reach 159.8 percent of GDP at the end of the year, the second highest ratio in the eurozone after Greece. “If the Italian plan were to fail, it would call into question the whole European policy of common debt,” Carlo Altomonte, professor of economy at Milan’s Bocconi University, said. – AFP