EU Commission approves Italy’s 191.5 bln euro recovery scheme

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The European Commission approved on Tuesday Italy’s 191.5 billion euro plan, the biggest in the European Union, to recover from the pandemic and transform the economy to become greener and more digitalised in coming years.

The scheme will be financed from EU grants and loans until 2026, with 68.9 billion euros in grants and 122.6 billion in loans that will be jointly raised on the market by the 27-nation bloc to lower the cost of borrowing.

Once the plan is also approved by EU finance ministers in July, Italy will get 24.9 billion euros in pre-financing for projects foreseen under the plan.

The Commission said Italy would allocate 37% of all spending, the EU requirement, to fight climate change through renovation to increase the energy efficiency of buildings.

It will also promote the use of renewable energy sources, including hydrogen and put special emphasis on reducing greenhouse gas emissions from transport, with investments in sustainable urban mobility and railway infrastructure.

Italy is also to spend 25% of the total, above the EU requirement of 20%, on making the economy more fit for the digital age, by the digitalisation of businesses and the expansion of ultra-fast broadband networks and 5G connectivity.

Rome will also invest in the digitalisation of the public administration, health, justice and education.

President Ursula von der Leyen said: “Today, the European Commission has decided to give its green light to Italy’s €191.5 billion recovery and resilience plan. This unprecedented level of investment, coupled with crucial reforms will help rebuild the Italian economy and prepare it for the future. I am proud that NextGenerationEU will help the Italian people look to the future with confidence and ambition. Now is the time to deliver. We will stand by you every step of the way to ensure that the plan will be an Italian and European success.”

Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said: “Italy’s plan will give a structural boost to its economic growth and help to reduce social and regional differences. Ambitious reforms of the public administration and justice system – including through digitalisation – along with improvements to the business environment will do a great deal to remove barriers that are holding up growth. Efforts to reduce tax evasion and make public spending more efficient will make Italy’s economy fairer and more sustainable. We also welcome the plan’s social aspects, particularly for providing social housing, the measures to benefit southern regions, and its focus on improving education and job opportunities. It will also help to protect the climate by raising energy efficiency of buildings, boosting sustainable transport and promoting renewable energy. We look forward to the plan bringing about real change on the ground once it is put fully into effect.”

Paolo Gentiloni, Commissioner for Economy, said: “After an unprecedented crisis, Italy today has a unique opportunity to build a better future. Italy has presented a plan for reforms and investments that will enable the country to address problems that have held back economic development and social progress for far too long. A more effective public administration, more efficient legal proceedings, increased competition: we are no longer talking about a book of dreams but about key elements in a detailed work programme. At the same time, Italy will carry out crucial investments in sustainable mobility, renewable energy, the digitalisation of businesses and the roll-out of 5G and ultra-broadband, unleashing new opportunities for all parts of the country. If Italy can make a success of NextGenerationEU, it can mark the start of a new chapter of stronger growth and sustainable development. Achieving that success must be the number one priority for the years to come. Europe will be at Italy’s side every step of the way.”

ComuniqEU with Reuters / EU Commission