As do many European countries, Italy is trying to find the right balance between measures to keep the virus and its more contagious mutations in check and providing wiggle room to the economy and its people.
Politicians are demanding more freedom
Where epidemiologists ask for tougher measures, several politicians are demanding more freedom. At the same time, the government is trying to find the right balance between supporting the economy’s recovery from last year’s 8.9% contraction and winding down support in order to not keep insolvable firms and unviable jobs alive forever.
Last but not least, the new Draghi government is tasked with formulating and implementing a comprehensive investment and reform plan, to improve the economic outlook and debt sustainability of an ageing country that has failed to overcome the previous two crises and show material growth since the start the century.
Draghi government is tasked with formulating and implementing a comprehensive investment and reform plan.
The economic impact of the EU recovery fund
So far, the setup of the EU crisis recovery fund has already supported the Italian economy by pulling down government bond yields Back to the fund.
In the coming years Italy could receive about EUR 70bn (4.3% of 2020 GDP) in investment subsidies from the EU’s Recovery and Resilience Facility.
Commitments will be based on investment plans that the Italian government presents to the European Commission.
Italy is slow in spending money from European Structural and Investment Funds (ESIF)
By 4 March 2021, it had consumed only 53% of the available funds under the multiannual EU budget 2014-2020, ranked 22nd among all member states.
