Italy Falls Short of EU COVID-19 Recovery Fund Spending Targets

The Italian government is under pressure to demonstrate effective use of the EU recovery funds to stimulate economic growth and stabilize public finances.

Italy has utilized about 45% of the 113.5 billion euros ($123.5 billion) it has received from European Union COVID-19 recovery funds, falling short of a target set in 2022, the Italian government announced on Monday.

The execution of this plan is crucial for Italy’s efforts to revitalize its slow-growing economy and manage its strained public finances, as noted by investors and rating agencies.

European Affairs Minister Raffaele Fitto revealed at a press conference that since 2021, Rome had expended 51.4 billion euros of the EU funds designated for economic recovery from the COVID-19 pandemic.

This expenditure falls significantly short of the original target set for the 2021-2023 period, which had been revised multiple times and was set at 61 billion euros in late 2022.

The press conference followed a government meeting during which Prime Minister Giorgia Meloni stated that Italy had secured 58.4% of the 194.4 billion euros allocated to it for the period between 2021 and 2026.

This figure represents the highest percentage of any EU country, according to a statement from her office.

“We must therefore all remain extremely focused, and continue to play the team game that has allowed us to be number one in Europe so far in terms of goals achieved and financial progress,” Meloni emphasized during the meeting.

The Italian government is under pressure to demonstrate effective use of the EU recovery funds to stimulate economic growth and stabilize public finances.

The shortfall in spending highlights the challenges Italy faces in implementing its recovery plan and achieving the set targets.

Despite being the leading EU country in terms of funds obtained, the gap between received and utilized funds raises concerns about Italy’s ability to fully leverage the available financial support.

The government’s focus remains on ensuring that the remaining funds are efficiently spent to meet the economic recovery objectives.

Prime Minister Meloni’s call for continued teamwork and focus underscores the importance of collective efforts in navigating the economic recovery and maintaining Italy’s leading position in the EU’s financial progress metrics.