Summary
Companies in Italy are falling behind in achieving policy goals and spending the European Union pandemic recovery funds. Delays in launching projects are hindering much-needed investments, posing a risk of increasing debt rather than promoting growth. Italy secured a significant portion of the EU funds in mid-2020, but Brussels is withholding the funds due to Italy’s failure to meet the agreed policy targets and milestones. The country is also lagging in spending the money already transferred, raising concerns about the sustainability of its large debt. Prime Minister Giorgia Meloni plans to present a revised recovery plan to Brussels next month. However, the impact on economic growth is diminishing, with the recovery plan contributing less than expected. Italy’s acceptance of both grants and loans from the EU has raised concerns among investors about the potential impact on debt. Italy’s largest bank, Intesa Sanpaolo, emphasizes the need for 2% annual growth.
Source from www.reuters.com