The Italian government’s draft decision to use resources from the EU’s Recovery and Resilience Fund (RRF) to cut public spending risks setting a dangerous precedent for future EU co-financing, Italian MEP Rosa D’Amato of the Greens and the European Free Alliance group told Euractiv.
She warned that the decision signed by Italian economy and interior ministers Giancarlo Giorgetti and Matteo Piantedosi, which includes budget cuts for municipalities and regions, will hit hardest local authorities, which have been among the main recipients of RRF funds since the pandemic, and will particularly affect southern regions.
The funding cuts, which will form part of the Meloni government’s forthcoming spending review, involve a €1.25bn reduction in spending between 2024 and 2028 – 50 per cent of current spending and a further 50 per cent of “contributions allocated to each authority from RRF funds.”
In a letter sent to European Commissioner for the Economy Paolo Gentiloni on Wednesday and made available to Euractiv, the Greens MEP asked for a formal assessment of the measure to determine whether it violates the RRF’s objectives.
She said the move would breach the principle of additionality enshrined in Article 5 of the 2021 RRF measure, which states that “support from the fund does not replace budgetary expenditure and respects the principle of additionality.”
RRF funding totalled €6.1bn and covered public crèches and kindergartens as well as urban development projects. Marco Leonardi, professor of economics at the University of Milan, told Euractiv:
From the very beginning, municipalities have warned the government of the risk of making investments such as in kindergartens and then being left without the current expenditure transfer needed to hire, for example, kindergarten teachers.
Leonardi said the cuts envisaged in the draft regulation, which are based on RRF payments, are “exactly the opposite of what should be done and are an incredible negation of the core principle of the National Recovery and Resilience Plan (NRP)” – the national rollover of the RRF programme.
Protect cohesion policy from centralisation
Although European Affairs Minister Raffaele Fitto, local authorities and opposition parties criticised the decree, D’Amato warned that it would have significance beyond the RRF.
At a time when Brussels lawmakers are gathering momentum to extend the reform-based RRF structure to EU cohesion funds, which make up about a third of the bloc’s regular budget, the measure could set a precedent with far-reaching consequences.
So far, a direct relationship between the European Commission and local authorities has managed the cohesion funds, unlike the RRF where the EU executive only deals with central governments.
D’Amato told Euractiv that she felt “particularly opposed to changing the rules of cohesion policy to make them similar to those of the RRF” as she warned that if extended to other EU funds, the creation of the RRF would further centralise the political influence of national governments.
She said it was necessary to protect the role of regions from the decision-making power of central governments, “cohesion policy from attempts to turn it into a kind of national seven-year recovery and sustainability plan.”
The Green politician argues that member states are “putting strong pressure” to turn regional policy ‘into an “a la carte” policy without territorial restrictions, without partnership agreements, without a focus on SMEs’.
