The focus of his proposals to the commission needs to be on addressing “Italy’s structural incapacity to spend money, which is related to the public sector’s ability to make decisions, pursue transparent processes, and undertake auditing,” she says.
This points to one of the commission’s biggest questions about Italy and the recovery fund: whether the country is up to the task of spending such a vast quantity of money wisely over a contracted period of time. Italy’s history here is far from encouraging.
Along with Spain, Italy has one of the worst track records for efficiently spending EU structural funds. In the 2014-20 EU budget period, Spain managed to spend only 36 per cent of those funds by late last year, with Italy only a little better at 43 per cent. By contrast, France’s absorption rate was 61 per cent, and Finland’s was 81 per cent.
Yet together Italy and Spain will receive no less than 40 per cent of the EU recovery fund harvest — dominating the spending programme. This means the reputation of the entire project rests on those countries’ ability to come up with credible programmes that meet the commission’s green and digital priorities and minimise boondoggles, waste and fraud.
Some officials hope the Next Generation EU project — which is officially designed to be temporary — could become a permanent feature of Europe’s set-up. But as Erik Nielsen, chief economist at UniCredit, says, that dream “only has a chance if the money is well spent and certainly not wasted”.