(Bloomberg) -- Italy’s right-wing coalition would not seek an overhaul of the country’s plan for spending European Union recovery funds, a leading member of the alliance said as investors closely watch Sunday’s general elections.
“It is impossible to renegotiate Italy’s plan to spend the funds,” Antonio Tajani, deputy head of the center-right Forza Italia party and a former president of the European Parliament, told Bloomberg in Rome on Tuesday. “More flexibility is possible, not a revolution.”
Silvio Berlusconi’s Forza Italia is part of the alliance headed by the far-right Brothers of Italy which is set to score a landslide victory. Investors are concerned about any prospect of the coalition trying to renegotiate the pandemic recovery plan, worth over 200 billion euros ($200 billion), which Mario Draghi’s government drew up with Brussels.
The coalition has yet to detail just what changes it would seek, against a backdrop of fragile Italian finances, an energy crisis and rising interest rates. The alliance’s electoral program says that a revision of the plan could be discussed with the European Commission, the EU’s executive arm, respecting the bloc’s laws.
Asking Brussels to renegotiate the framework of the spending plan would put the funds at risk, Tajani said. Added flexibility could still be negotiated for how the money is spent on the ground, for example shifting funds from building a road to a bridge, Tajani said.
Giorgia Meloni of Brothers of Italy, the likely next prime minister, has said that Italy hasn’t allocated the funds to the right sectors. Her party abstained in a parliamentary vote which approved the plan. Matteo Salvini, leader of the anti-migrant League which is also part of the coalition, said in March that Italy’s recovery plan is an archaeological document which needs to be updated.
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“The bla-bla-bla during an election campaign is normal,” Tajani said, adding that the coalition’s program would act as a “guarantee” for investors and foreign partners as it focuses on “Europe, United States, NATO.” Tajani was “sure” that Meloni “will respect the program and Salvini also.”
The EU favors only limited corrections to post-pandemic recovery plans, Economy Commissioner Paolo Gentiloni said on Aug. 20. He said the doors in Brussels were not open “to rethink and restart from scratch a program on which the fate of the European economy depends.”
Tajani said a right wing administration would try to reduce Italy’s mammoth debt pile, but “it is difficult to do it if gas prices go up.” He added: “We want to respect the EU budget rules, but this is not easy. For this, we are proposing a new EU recovery plan on energy and agriculture and food.”
The EU must protect Germany, Italy and Poland as they are paying the biggest economic and social price for Russia’s war in Ukraine, Tajani added.
“Our position is very clear,” Tajani said. “We are in favor of sanctions against Russia. We need to protect our families and our companies because we are paying an economic price for the sanctions. It is the price for defending values.”
©2022 Bloomberg L.P.
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