Italy to spend 222 billion euros of EU funds to revive economy

Italian Premier Giuseppe Conte (R) with Italian journalist Bruno Vespa (L) during the TV talk show Porta a Porta, Rome, Italy, 23 December 2020. [EPA-EFE/Riccardo Antimiani]

Italy plans to spend more than €222 billion from various European Union funds to revive its coronavirus-battered economy, a draft government document seen by Reuters showed on Thursday (7 January).

Rome is entitled to more than €200 billion from a European emergency programme designed to help those EU nations hardest hit by the coronavirus.

The €222 billion scheme includes resources from the emergency fund and other European programmes, including an agricultural fund, the document showed.

The plan still needs to be approved by the cabinet which will likely meet before f end of this week, according to government sources.

Prime Minister Giuseppe Conte is facing internal opposition from former premier Matteo Renzi, whose centrist Italia Viva party polls at no more than around 3% but is crucial for the government’s survival.

Italian government totters as Conte, Renzi divide deepens

Italian Prime Minister Giuseppe Conte faces a showdown with his coalition partner and former premier Matteo Renzi this week that could bring down his government even as it struggles to contain the COVID-19 pandemic.

Italia Viva has criticized Conte’s first proposals on how to spend the funds and has repeatedly threatened to withdraw its support if the government did not agree to put more money into critical sectors such as healthcare and infrastructure.

Renzi is also upset about the government’s reluctance to ask for a loan from the eurozone’s bailout fund (ESM), which he says could help provide more funds to the country’s coronavirus-hit hospitals.

Based on the new draft document, the government plans to increase its healthcare investments to €18 billion and allocate €4 billion to broadband and other high-tech communication infrastructures, including 5G networks.

The Treasury estimates in the draft that the investment programmes can boost GDP growth by 3 percentage points by 2026.

Before Italy was hit by a second wave of the pandemic, the government estimated in September that GDP would rebound 6% in 2021, following a contraction of 9% in 2020.

Subscribe to our newsletters