(CN) — The clock is ticking and Italy is panicking.
A political storm is brewing over Italy's struggles to meet deadlines, targets and requirements set out by the European Union in order to receive billions of euros in pandemic recovery aid that, in theory, could reawaken Italy's moribund economy and launch the creaky nation into the future.
The scale of the problem — and the risk of failure — is huge and sparking political rows over how and how much of the money should be spent. Projects are at risk or have already been lost, including plans to build many new preschools, expand the map of electric vehicle charging stations, a major enlargement of Cinecittà, Italy's famous national film studios, and much-needed repairs to old municipal water systems.
“They are having trouble spending the money,” said Martina Zaghi, a data journalist with Fondazione Openpolis, an Italian watchdog group. She tracks the recovery funds.
This week, Raffaele Fitto, the minister overseeing Italy's recovery money, ignited more furor by suggesting the country can't spend all the EU funds and needs to overhaul its plans. Fitto quickly retracted his statements to La Stampa newspaper as others inside his government and in the opposition cried foul. Still, he's busy tinkering with Italy's aspirations.
Three years ago, Brussels announced the Next Generation EU, a historic 750 billion euro (about $809 billion) stimulus fund to both kickstart pandemic-strangled economies and advance the EU's ambitions to modernize through investment in green and digital technologies and infrastructure.
It was the first time the EU as a whole agreed to accrue common debt, a step defined as a major shift toward deeper integration and even the federalization of the bloc. But it was also a hard-fought win because the EU's richer northern nations have long opposed taking on the debt of the less affluent, chief among them Italy's big but broken economy.
The fund, then, was called a one-time shot in the arm with the money getting carefully doled out in stages and split between grants and loans. A December 2026 deadline was set for the aid payments.
Italy, having been hit particularly hard by the coronavirus pandemic and its long-stagnant economy in dire need of new energy, was due to collect a lion's share of that money — about 191.5 billion euros (about $207 billion). Per capita real gross domestic product in Italy has not grown since 1999, the year it adopted the euro currency, and its public debt is one of the highest in the world.
With so much funding available, Italy's national recovery plans were multifaceted and vast.
They included new digital identity cards for citizens; digitizing public services; installing 5G fiber optic lines; building high-speed railways; special help for at-risk children; large-scale spending to improve recycling and install solar panels on buildings; investing in Italian space projects, such as new satellites; making museums, theaters and other public buildings energy efficient and accessible to the disabled; turning small towns into tourist attractions; spending billions on renewable energy projects, such as electric buses; and turning its tiny Mediterranean islands into self-sufficient beacons of green energy.
But Italy's fumbling.
Only a small portion of the funds slated for it has been spent so far, and concerns are mounting that scores of projects may never come to fruition or end up as completed but a waste of money.
Lorenzo Codogno, an Italian economist at the London School of Economics, said it is imperative for Italy to not spoil this opportunity.
“It is the first time that Italy has such a large amount of money to invest in infrastructure, in digital and climate transformation,” Codogno said. “It is a once-in-a-lifetime chance to enhance potential growth.”