Giorgia Meloni and Ursula von der Leyen in Rome on Jan. 9, 2024.

Giorgia Meloni and Ursula von der Leyen in Rome on Jan. 9, 2024. (Alessia Pierdomenico/Bloomberg)

The government of Prime Minister Giorgia Meloni is fulfilling the obligations needed to unlock aid from the European Union’s recovery fund as the administration seeks to boost Italy’s anemic economy, according to the bloc’s executive arm.

“Italy is well on track in the implementation” of the fund, European Commission President Ursula von der Leyen, said at a press conference with Meloni in the city of Forli on Wednesday. “The commission has disposed the fourth payment at the end of December” which means half of the funds have been disbursed “and I think this is great news,” von der Leyen added.

The fourth payment worth €16.5 billion ($17.9 billion) brings the amount received in both grants and loans to €102 billion or more than half of the total €194 billion allotted.

Meloni needs the funds to strengthen the economy. EU Commissioner Paolo Gentiloni has said that investments linked to the fund will add 0.5 percentage points to Italy’s growth every year.

With debt stuck at a whopping 140% of output, Meloni is counting on a recovery to finance promises to voters including tax cuts and aid to lower-income families, while attempting to bring down the deficit in line with EU rules.

Speaking from Forli which suffered damage from heavy flooding last year and will receive funds to help with reconstruction, Meloni pointed out that despite some initial difficulties Italy managed to present a revised spending plan for the EU cash and is now fulfilling its goals.

With assistance from Katharina Rosskopf.

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©2024 Bloomberg L.P.

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