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Exclusive: Italy risks missing Recovery Plan deadline due to EU concerns, sources say

EconomyApr 18, 2021 12:15AM ET
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© Reuters. FILE PHOTO: Italian Prime Minister Mario Draghi meets journalists, in Rome

By Giuseppe Fonte and Gavin Jones

ROME (Reuters) - Italy risks missing an April 30 deadline for submitting a final version of its Recovery Plan to the European Commission because Brussels is not satisfied with several aspects of the drafts presented so far, two sources close to the matter said.

A spokesman for Prime Minister Mario Draghi firmly denied that the deadline would be missed. "The plan will be presented on April 30," he said. An Economy Ministry spokesman said "our aim remains to present it on April 30".

A delay would be a blow to Draghi, who took office two months ago tasked with fine-tuning the plan prepared by the previous government.

All 27 European Union countries have been working on their national plans which spell out how each government wants to spend its share of the EU's 750-billion-euro ($900 billion) Recovery Fund joint borrowing scheme.

Italy is eligible for more than 200 billion euros in grants and cheap loans from the Fund, the biggest slice of any EU country. The money will be disbursed gradually over six years.

"The Commission is unhappy with the Recovery Plan as it stands," said one of the sources, who asked not to be named due to the sensitivity of the matter.

The source said Draghi would probably present the plan around mid-May, but a longer period may be required to overcome the Commission's objections.

Among Brussels' main concerns are a lack of detail over how the plan will be managed once it gets EU approval and the substance of some of the reforms outlined, including of the justice system, the source said.

Another source also said Brussels wanted changes to the plan, which would require time, and said mid-May now seemed a "realistic" period for its presentation.

Italy has not previously suggested it might be late, and Draghi told reporters on April 8 that "on April 30 we will deliver our plan".

A Commission spokeswoman said it had no comment to make on the Italian plan in particular, but the Commission understood that drawing up the Recovery Plans was a challenging task for all member states while they are also focused on tackling the COVID-19 pandemic.

While the plans should be presented by April 30 as a rule, some countries "may need a few more weeks," she said, and "quality should be the first priority". She added that the Commission was currently in "intensive dialogue" with all countries on the preparation of their plans.

BLUEPRINTS FOR SPENDING

Commission Vice President Valdis Dombrovskis said on Friday that some EU countries would miss the April 30 target date, without saying which ones.

Draghi's main mission on taking office, along with the COVID-19 vaccination campaign, was to present a solid Recovery Plan to ensure the flow of the EU funds to finally unleash growth for the chronically sluggish economy.

The national plans are blueprints for spending grants and loans that each EU country will get from the unprecedented joint borrowing by the Commission to rebuild economies greener and more digital after the COVID-19 pandemic.

In his comments on Friday, Dombrovskis said the delay in the submission of some plans would not push back the scheme as a whole, details of which still require ratification by some countries' parliaments.

Provided any delays in the presentation of the plans are not too long, and the ratification is completed in all member states by June, the Commission can make first disbursements in July, Dombrovskis said.

($1 = 0.8345 euros)

Exclusive: Italy risks missing Recovery Plan deadline due to EU concerns, sources say
 

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Comments (3)
GP PS
GP PS Apr 18, 2021 2:47AM ET
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I know very well the Italian political and economical environment, since I lived there a good part of my life. The money will end up as subsidies to the criminal organizations and to the crooks of Confindutria, the Italian association of industrialists and builders. The typical Italian "enterpreneur" is more used to deal with politicians rather than the market to get his business going. That is the reason why the Italian government debt is so big. This recovery fund will simply make things worse. Draghi was chosen to be prime minister to manage the recovery fund. It has the strong backing of Confidustria and of all those Italian politicians who thrived with the usual corruption. That is the situation. Please don't let Italian politicians get more money. What is going to happen when Italy will not be able to pay back the debt? Another Greece in a much bigger scale?
oeg vokar
oeg vokar Apr 18, 2021 2:47AM ET
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It's good you are familiar with Italian politics and corruption....but unfortunately this is how most countries are run now.
GP PS
GP PS Apr 18, 2021 2:47AM ET
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You can find corruption everywhere. But the scale is different. In some countries the situation is so bad that financing them means siphoning money to crooks and criminals. That is the case for a country like Italy. When the situation will go wrong, maybe you can expect that Italian ordinary citizens will pay the bill. But this time I would not bet the house on it. The best thing for all (Italians and Europeans) is avoiding financing a rotten state.
حسن الفتلاوي
حسن الفتلاوي Apr 18, 2021 2:22AM ET
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= 0.8345 euro
Peter BullMarket
Peter BullMarket Apr 18, 2021 1:34AM ET
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Pure speculation, Draghi is still the big name on EU, Italy and ECB, he will delivery the plan and Brussels will praise him at the end
Fabrice Lange
Fabrice Lange Apr 18, 2021 1:34AM ET
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Probably but Italy is the sick man of Europe and needs urgently to be under supervision of Europe..
 
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