Relations are cordial, relaxed and relatively fluid. Nobody is interested now in tightening the rope between Brussels and Rome. The balances that must be maintained are too many: the war in Ukraine, migratory pressure, the reform of the European Stability Mechanism… So the tone is soft, but the message that comes out of the community capital is also quite clear: the reforms promoted by the Government of Giorgia Meloni are poorly focused. It is time to change the course in several aspects.
Italy is the largest beneficiary of the EU recovery fund (with some 200,000 million between grants and loans) and if it wants to continue opting for all the quotas that correspond to it – the third is still being studied in Brussels after being delayed by defaults of Rome – will have to modify its approach to the issue. A severe warning that the Italian Executive did not have at this time and that arrived on Wednesday, just the day before the president of the European Commission, Ursula von der Leyen, traveled to Italy to show solidarity with the victims of the floods in Emilia-Romagna.
The two leaders exhibited good harmony while visiting the areas affected by the floods. “Europe is with Italy,” said Von der Leyen about the catastrophe that has affected the north of the country. But the opinion issued on Wednesday by the European Commission is quite clear. “The implementation of the recovery plan is underway, but with a growing risk of delays,” said the Community Executive in its biannual recommendations to the Member States, in which it calls on Rome to maintain a “prudent” fiscal policy and to simplify bureaucratic procedures to advance in renewable energies. It also advises that pandemic recovery funds must be spent by 2026 or they will no longer be available. In addition, Brussels disagrees on the differentiated regional autonomy plan, on the single type of personal income tax and on the early retirement plan.
The criticism is directed at three fundamental pillars of the League, Meloni’s partner in the coalition government of the three forces, which ranges from the right to the extreme right. And that means that the prime minister will have a very difficult time satisfying the demands that come from Brussels without creating enormous internal tensions in her Executive: especially with Matteo Salvini, vice president and leader of the League.
spend half the money
Meloni’s team, for the moment, publicly blames the government of his predecessor, Mario Draghi, and the design he made of the plan. But in private they are aware of the seriousness of the situation and the lack of capacity of the Italian administrations to absorb said plan. In the Executive itself, they are already beginning to assume that, probably, they will only be able to spend half of the allocated money. In any case, government sources point out to this newspaper, “there is no concern about the recommendations from Brussels.” “They will be considered. But our policies are already in line with the Commission document. The budget policy is prudent and we are growing more than the other countries”, these sources point out.
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The spirit of the plan and the funds is for Italy to use part of that money (between loans and grants) to reduce inequality, strengthen its infrastructure and undertake long-term reform programs to make its debt more sustainable. In the semi-annual recommendations from Brussels, however, he warns Rome that it has to strengthen its administrative capacity, especially at the regional level, so that plans can be put into action “quickly and steadily.”
Italy is lagging behind in meeting the targets and commitments made, which included tax reforms, among other things. “The single type of personal income tax arouses concern about its equity and efficiency,” laments the Commission. But there are also sticks against the plan to implement differentiated autonomy in the regions: “It puts the government’s ability to control public spending at risk.” Or about the reform of the cadastre, which is used to calculate taxes on real estate, a source of income that is suggested from Brussels to face the cut in labor costs.
Italy, the third largest economy in the EU, has already received two payments from the fund and the European Commission is now verifying the third, according to the economic vice president of the Community Executive, Valdis Dombrovskis, who has demanded that the Meloni government present the revised plan , with the chapter dedicated to the green transition, one of Italy’s weaknesses, developed. Even so, for the moment, the blood does not reach the river.
Meloni keeps a low profile in Brussels. Perhaps too much, some think. The Italian has hardly launched proposals and has not adopted a “proactive” position, says a senior diplomat who usually attends council summits where heads of state and government debate. Other voices believe that Meloni, with very strong anti-immigration positions, is benefiting from the fact that other countries have embraced those positions. In addition, the Community Executive shares some of your concerns about the increase in arrival flows in the Mediterranean and is focusing on Tunisia. Brussels is concerned about the ultra-conservative Italian government’s attack on social rights – such as its guidelines to veto the registration of children of same-sex couples -; but despite the fact that he has expressed his concern, he has little room for maneuver. The European Parliament has harshly criticized Italy on that issue.
Meloni, however, has set the goal of maintaining that line, at least until the European elections in June 2024. The idea is to gain a foothold in Italy and convey an image of seriousness and reliability to try an alliance with the European People’s Party (to which the president of the European Commission, Ursula von der Leyen, also belongs). For the EPP, Italy, where its affiliate Forza Italia agreed with Meloni’s ultra party to be in government, is a laboratory that serves to test the experience in other places.
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