By Giuseppe Fonte
ROME (Reuters) – Italy plans to adopt on Monday a decree to ensure the timely enforcement of its EU-funded recovery plan, a draft decree showed, while earmarking 6.2 billion euros ($6.7 billion) in tax breaks for companies committed to cutting energy consumption.
The scheme stems from a deal the government clinched with the European Union to revise and revamp an overall investment programme now worth 194.4 billion euros through 2026. Italy also aims to address some issues that have led it to fall behind schedule in spending the cash it has already received.
Rome spent 45.65 billion euros between 2021 and 2023 of EU funds disbursed to support the economic recovery from the COVID-19 pandemic, below an original target of 86 billion over the same period which had already been revised downwards several times and then set to 61.4 billion in late 2022.
The draft decree seen by Reuters is still subject to changes. The cabinet is expected to discuss it at a meeting scheduled for 1430 GMT, the government said in a statement last week.
Among a raft of measures, the draft decree strengthens extensive powers of Prime Minister Giorgia Meloni’s office to appoint special commissioners if one or more targets are at risk.
Around 3.15 billion euros both this year and next will go to help companies investing in “innovation projects” to reduce their energy costs, with a maximum limit of eligible costs worth 50 million euros per recipient firm per year.
Additional 150 million euros are earmarked to promote startups investing in Artificial Intelligence (AI), cybersecurity and 5G infrastructures, under a plan anchored by state lender Cassa Depositi e Prestiti (CDP).
Successive governments in Rome have presented the EU cash as the key to unlocking the country’s growth potential and modernising its sluggish economy, yet a Commission report published last week projected a smaller impact than Italy’s own estimates.
According to Brussels’ “mid-term evaluation” of the plan, under a best case scenario Italian gross domestic product in 2026 will be just over 2.5 percentage points higher than it would have been without the EU funds.
Italy’s latest official estimates had pencilled in a cumulative GDP increase of 3.4 points by 2026.
($1 = 0.9232 euros)
(Reporting by Giuseppe Fonte; Editing by Emelia Sithole-Matarise)
