Italy's Conte says EU virus recovery funds will be spent wisely


Rome (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 two-month lockdown.

In an exclusive interview to AFP, the leader of Europe's third-largest economy said Italy's share of the 750 billion euro ($845 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, subpar infrastructure, including slow adoption of digital technology, and widespread tax evasion.

"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 two-month 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.

- Structural challenges -

After months of wrangling among EU leaders, the European Commission in May agreed to its unprecedented recovery plan, comprised of 500 billion euros in grants and 250 billion in loans.

Italy is expected to receive 172 billion euros.

Conte will head to Brussels in September, where he will present a detailed plan for how the 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 due to continue till June 21.

With Italy's GDP expected to drop 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 compile ideas for Italy's economic rebound while removing structural and bureaucratic barriers.

"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.