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POLITICS

Coronavirus bailout is ‘an opportunity to design a better Italy’, says PM Giuseppe Conte

The €170 billion recovery fund granted to Italy by the EU is a chance for the country to invest in reform and catch up with its European neighbours, the prime minister says.

Coronavirus bailout is 'an opportunity to design a better Italy', says PM Giuseppe Conte
Prime Minister of Italy Giuseppe Conte this week. Photo: Tiziana Fabi/AFP

Italian Prime Minister Giuseppe Conte on Tuesday sought to reassure Europe that forthcoming coronavirus recovery funds would be spent wisely to revive the battered economy after a crippling lockdown.

In an exclusive interview to AFP, the leader of Europe's third-largest economy said Italy's share of the €750 billion recovery plan agreed by the European Commission would be the impetus to fix longstanding problems at home.

Economists say entrenched structural problems have put the brakes on progress for decades. They include Italy's burdensome public bureaucracy, sub-par infrastructure, including slow adoption of digital technology, and widespread tax evasion.

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“It's an opportunity for us to design a better Italy, to work on a serious, comprehensive investment plan that will make the country more modern, greener, and more socially inclusive,” Conte said.

The first European country to be hit by the coronavirus pandemic, Italy is reeling from the economic effects of a lockdown imposed in March to stem the spread of the virus that has killed nearly 34,500 people.

“I often say it's not a handout to benefit the current government, it's an investment we must make in Italy and in Europe for our children and grandchildren,” Conte said.


Conte at an EU summit in February. Photo: Aris Oikonomou/AFP

After months of wrangling among EU leaders and opposition from northern European countries, the European Commission in May agreed an unprecedented recovery plan, comprised of €500 billion in grants and €250 billion in loans. 

Under the biggest EU stimulus package in history, Italy is expected to receive €172 billion, the largest share.

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Italy and Spain had fought hard for a deal that would prioritise grants rather than loans, against the wishes of northern EU member states who insisted on a loans-only rescue package. On Tuesday, Conte had words of praise for his European partners, saying he recognised that in Germany, “there was a great internal debate” over how Europe should respond to the economic crisis set in motion by the coronavirus.

“Compared to the very rigid initial stances, there has been an improvement,” he said. “Germany has understood that it would not be appropriate for it either to have a Europe, a single market, that is so divided and fragmented.”

Conte said he and France's President Emmanuel Macron had “shared this battle from the beginning”, referring to early French support for Italy's call for budget solidarity within the EU. “We were among the protagonists of those who immediately called for a strong, solid and immediate European response,” Conte said.

As for post-Brexit negotiations with Britain, Conte said the month of July would be “crucial” but he was confident that a solution would be found “in the mutual interest of the parties”.

“Especially during this pandemic, it's of no use to the EU or to the UK if an agreement is not reached with a historic partner like the UK.”

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Conte will head to Brussels in September, where he will present a detailed plan for how the EU funds will be spent. Broad outlines of that plan are being debated at a general assembly organised by Conte that began in Rome on Saturday and is due to continue until June 21st.

With Italy's economy expected to shrink at least by 8.3 percent this year, the country's main employers' organisation has sounded the alarm, calling for serious reforms and a plan to help businesses facing potential bankruptcy.

The prime minister has invited economists, academics, unions and business associations, as well as EU leaders, saying he wanted to unite “the country's strongest forces” to come up with ideas for Italy's economic rebound while removing structural and bureaucratic barriers.

Priority areas include the green economy, investment in research and training, the modernisation of Italy's slow judicial processes, and more support for the key tourism, automobile and food industries.

“Italy has had a lower growth rate in recent years compared to other European countries. Today is an opportunity for us, with these resources, to catch up,” Conte said.

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ENERGY

Italy’s Draghi criticises Germany over latest energy plan

Outgoing Italian PM Mario Draghi condemned Germany’s €200-billion energy-prices shield, saying EU ‘must act together’.

Italy's Draghi criticises Germany over latest energy plan

Outgoing Italian Prime Minister Mario Draghi and his likely successor have criticised Germany’s 200-billion move to shield its citizens from rising energy prices, saying Europe must act together to tackle the energy crisis.

“Faced with the common threats of our times, we cannot divide ourselves according to the amount of room in our national budgets,” Draghi said in a press release on Thursday.

READ ALSO: Electricity bills in Italy to rise by 59 percent, warns power regulator

The statement came after Germany introduced a 200-billion ($194-billion) shield to protect households and businesses from soaring energy prices, 

The measure was Germany’s move in what the country’s Finance Minister Christian Lindner described as an “energy war over prosperity and freedom” with Russia.

“The energy crisis requires a response from Europe to reduce costs for families and businesses, to limit exceptional gains made by producers and importers, […] and to keep Europe united once against in the face of an emergency,” Draghi said, commenting on Germany’s move.

At a meeting of EU energy ministers in Brussels on Friday, Italy’s Roberto Cingolani reiterated Rome’s support for an EU-wide cap on the price of gas – something Draghi has long been calling for.

“Everyone has recognised that there is a priority at the moment, which is to bring down the cost of gas. But there is also a second priority, [that is] to avoid creating a shortage of gas in doing so,” Cingolani said.

READ ALSO: Portofino mayor offers residents €400 to offset energy bills

Draghi will only be in office for a few more weeks, after which he will likely be replaced by Giorgia Meloni, whose far-right Brothers of Italy party triumphed at last Sunday’s elections.

Like Draghi, Meloni has backed the idea of a European price cap thus far. 

Ahead of Friday’s energy meeting in Brussels, the soon-to-be new Italian PM also appeared to criticise Germany as she called for “an immediate European response” to the energy crisis.

“No member state can offer effective and long-term solutions on its own in the absence of a common strategy, not even those that appear less financially vulnerable,” she added.

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