Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Meloni’s main problem with the EU is spending its cash

Meloni’s main problem with the EU is spending its cash

Italy’s issues around spending COVID recovery funds could spell disaster for its economy — and Brussels’ reputation.

When Giorgia Meloni, the leader of a party with fascist roots, burst onto the EU political stage after winning elections last fall, quiet dread infiltrated Brussels.

She arrived in office shamelessly anti-immigrant, trumpeting “traditional” families and armed with a track record of Euroskeptic statements. A clash with Brussels was undoubtedly imminent.

Six months later, however, Meloni’s culture wars are not Brussels’ main headache with Rome — even as she pushes them back home. Instead, it’s about the money.

Rome is struggling to meet the terms and conditions Brussels has attached to billions in euros earmarked for Italy from the EU’s COVID recovery fund. Going forward, Meloni wants to renegotiate those terms to free up that money. But Brussels is still waiting for concrete plans that require its approval, as well as that from other EU countries.

While the battle may seem bureaucratic, this impasse carries major ramifications for both Meloni and the EU. Italy is the EU’s third-largest economy, and a failure to use that money could further drag down a country already battered by a generation of underinvestment and low growth.

It would also call into question the EU’s norm-breaking decision to collectively take on hundreds of billions of joint debt to help countries bounce back from the pandemic. Italy, slated to receive over a quarter of the massive €724 billion recovery fund, stands to be the biggest recipient in this decision.

If Italy fails to spend the money — and do so effectively — this will cast a shadow over the whole endeavor. Meloni will have squandered free billions, and EU countries will think long and hard before agreeing to any more debt-funded aid.

“It’s clear that two things need to happen in order for this to be a success: The first is that the money is spent, and the second is that the money is spent well,” said Nils Redeker, co-director of the Jacques Delors Centre, a think tank in Berlin.


It's the money, stupid


As Italy's new prime minister passes her six-month mark in office, many in Brussels are wondering what all the fuss was about.

“Meloni has been pretty quiet,” said one EU diplomat from a large member country, who spoke on condition of anonymity in order to freely discuss international dynamics. “It’s certainly been a surprise.”

Some of this comes down to personality and Meloni's canny knack for political messaging, which has helped her ascend Italy’s political ladder.

But unlike some other nationalists, Meloni doesn’t deploy megaphone diplomacy when in Brussels — opting instead to mostly speak in the private setting of the European Council, where EU leaders gather away from the media’s prying eyes.

She has also benefited by arriving in Brussels at a time when other EU countries are moving toward her hard-line stance on migration.

Meloni has pushed to limit same-sex parental rights. Meanwhile, one of her close political allies recently echoed white supremacists speaking of “ethnic replacement,” and yet another made inflammatory comments over the country’s fascist past.

While Meloni’s conservative crusades back home have been alarming many in Brussels, such issues are largely not the EU’s remit.

Instead, the most titanic clashes between Rome and Brussels are over a classic family issue: money management.

The EU has determined that Italy will get a staggering €191.5 billion from the post-pandemic fund. But Meloni’s management of that windfall is raising eyebrows in Brussels.

Most visibly, there are the sports stadiums. The government wanted to use some of the money to rehabilitate Florence’s 98-year-old arena and build a new one near Venice, but Brussels gave that a hard no. As a result, all of Italy’s the third payment under the recovery fund — €19 billion — has been delayed.

“Work is still ongoing on the Commission’s assessment of Italy’s third payment request,” said a European Commission spokesperson. "Constructive exchanges are being pursued with the Italian authorities, and further information is being provided where needed," the spokesperson added.

Publicly, Brussels is striking a conciliatory tone, with European Economy Commissioner Paolo Gentiloni insisting last month that “the points to be clarified will be clarified.” But, he added forebodingly: “The absorption of such huge resources is not easy in Italy, and therefore as the plan progresses the road becomes more demanding.”

Italy has a poor track record of spending EU funds, according to a Bruegel analysis in 2020, managing to use only 40 percent of resources during the last budget cycle. Pandemic recovery funds need to be spent by 2026 or are simply lost.

However, one Italian official who was not authorized to speak publicly stressed that more recent official EU data on the last budget cycle reflect that Italy is managing to use 65 percent of EU resources, nearly in line with the EU average.


Big spender runs into trouble


Rome had time to head off the spending spat.

Meloni campaigned last year on a promise to swiftly renegotiate the country’s post-pandemic spending plan. After she won, the Commission said it would listen — to some points.

“We’re only talking about investments, there’s no room to go back on reforms,” Declan Costello, the Commission’s second in command in its economic department, said at an event in Rome in mid-December.

Yet four months later, the Commission is still waiting to hear back from Rome.

A revised plan promised in April is unlikely to come before summer.

What’s more, Italy has requested further funding from a pool of untapped loans, without specifying how much — raising doubts given how the government is already struggling to spend what it was awarded.

The plan is entering a crucial phase: While many of Italy’s economic reforms were passed under erstwhile Prime Minister Mario Draghi, voting on laws is one thing; implementing investments is another.

So while the government can design the process to award contracts, and manage investment projects, regional and local authorities are often the ones to actually spend the money.

In other words, it takes time.

With this in mind, Raffaele Fitto — Italy’s EU affairs minister overseeing the recovery funds — has floated the idea of shifting some of the harder recovery projects subject to the 2026 deadline into Italy’s plans for its regular EU funds. That would give the country until 2029 to spend that money.

Fitto has already admitted Italy won’t be able to spend all of the recovery money in time.

“The full amount of resources,” he told Italian lawmakers earlier last month, “will not find 100 percent of its final expenditure in June 2026.”

Meloni also sent jitters through Brussels when she recently yanked control of the recovery funds away from her own finance ministry, bringing that to the prime minister’s office — a move she said was meant to accelerate the process. But others feared this will result in those with less fiscal expertise now running the show.

Fitto defended the move, saying the new setup will help implement the plan.


High stakes


Meloni can ill-afford to stumble in the bureaucratic hallways of Brussels. Losing any of the recovery money earmarked for Italy would be a disaster for her standing back home, with polling already showing the prime minister slowly losing popularity.

“No Italian prime minister can afford to waste a lottery ticket,” said an Italian official who worked in Draghi’s government, speaking anonymously in order to candidly discuss internal politics.

Also the EU’s reputation is on the line. Even though Brussels doesn’t want to cave to Meloni’s revisions or spending plans it finds objectionable, EU officials know that their gamble to take on billions in debt will only pay off if countries actually benefit.

“If there’s the perception that the [recovery fund] fails,” said Redeker, there might not be another one. “This would make any political discussion about what happens after the recovery fund much harder.”

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
British Labour Government Utilizes Counter-Terrorism Tools for Social Media Monitoring Against Legitimate Critics
OpenAI Launches GPT‑5, Its Most Advanced AI Model Yet
Brazilian President Lula says he’ll contact the leaders of BRICS states to propose a unified response to U.S. tariffs
US envoy Steve Witkoff arrived in Moscow to seek a breakthrough in the Ukraine war ahead of President Trump’s peace deadline
WhatsApp Deletes 6.8 Million Scam Accounts Amid Rising Global Fraud
Britain's Online Safety Law Sparks Outcry Over Privacy, Free Speech, and Mass Surveillance
Nine people have been hospitalized and dozens of salmonella cases have been reported after an outbreak of infections linked to certain brands of pistachios and pistachio-containing products, according to the Public Health Agency of Canada
Karol Nawrocki Inaugurated as Poland’s President, Setting Stage for Clash with Tusk Government
US Charges Two Chinese Nationals for Illegal Nvidia AI Chip Exports
Texas Residents Face Water Restrictions While AI Data Centers Consume Millions of Gallons
U.S. Tariff Policy Triggers Market Volatility Amid Growing Global Trade Tensions
Tariffs, AI, and the Shifting U.S. Macro Landscape: Navigating a New Economic Regime
German Finance Minister Criticizes Trump’s Attacks on Institutions
India Rejects U.S. Tariff Threat, Defends Russian Oil Purchases
United States Establishes Strategic Bitcoin Reserve and Digital Asset Stockpile
Thousands of Private ChatGPT Conversations Accidentally Indexed by Google
China Tightens Mineral Controls, Curtailing Critical Inputs for Western Defence Contractors
OpenAI’s Bold Bet: Teaching AI to Think, Not Just Chat
U.S. Tariffs Surge to Highest Levels in Nearly a Century Under Second Trump Term
Ong Beng Seng Pleads Guilty in Corruption Case Linked to Former Singapore Transport Minister
BP’s Largest Oil and Gas Find in 25 Years Uncovered Offshore Brazil
Italy Fines Shein One Million Euros for Misleading Sustainability Claims
JPMorgan and Coinbase Unveil Partnership to Let Chase Cardholders Buy Crypto Directly
Declassified Annex Links Soros‑Affiliated Officials and Clinton Campaign to ‘Russiagate’ Narrative
UK's Online Safety Law: A Front for Censorship
Parents Abandon Child at Barcelona Airport Over Passport Issue
Bus Driver Discovers Toddler Hidden in Suitcase in New Zealand
Switzerland Celebrates 734 Years of Independence Amid Global Changes
China Enforces Comprehensive Ban on Cryptocurrency Activities
Grok 4 Video plus Voice, can identify wildlife!
George Soros tells the World Economic Forum: "President Trump is a con man and the ultimate narcissist, who wants the world to revolve around him."
Hamas are STARVING the hostages.
The UK Does Not Have a ‘Far-Right’ Problem
British Tourist Dies Following Hair Transplant in Turkey, Police Investigate
WhatsApp Users Targeted in New Scam Involving Account Takeovers
JD Vance Warns Europe Faces “Civilizational Suicide” Over Open Borders and Speech Limits
Germany Enters Fiscal Crisis as Cabinet Approves €174 Billion in New Debt
Trump Administration Finalizes Broad Tariff Increases on Global Trade Partners
JD.com Launches €2.2 Billion Bid for German Electronics Retailer Ceconomy
Azerbaijan Proceeds with Plan to Legalise Casinos on Artificial Islands
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
House Republicans Move to Defund OECD Over Global Tax Dispute
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
Intel Reports Revenue Beats but Sees 81% Rise in Losses
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
×