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The European Union favors only limited corrections to post-pandemic recovery plans, Economy Commissioner Paolo Gentiloni said as a leading contender in Italian elections next month says it may demand changes if it wins power.
“The success of this extraordinary European plan will be determined to a very large extent by whether Italy succeeds in its recovery and resilience plan,” Gentiloni, a former Italian prime minister, told a meeting in Rimini on the Adriatic coast. He said that without an Italian success, “the success of this European plan is impossible.”
“If there is something concrete, targeted that people want to modify, to correct, the doors in Brussels are open but they are open for targeted and limited corrections, not to rethink and restart from scratch a program on which the fate of the European economy depends,” Gentiloni said.
A right-wing alliance led by Giorgia Meloni, of the far-right Brothers of Italy party, has indicated in its manifesto it could revise Italy’s recovery plan if it wins power after the Sept. 25 vote. This would trigger market turbulence and could see the European Commission, the EU’s executive arm, freeze payments out of the recovery fund if Rome goes back on reform commitments.
Gentiloni said that Brussels is telling all EU countries that “at a moment of such uncertainty for the European economy,” including “crazed energy prices,” governments must “accelerate” the recovery plans financed by joint debt issuance.
Investors are watching whether a change of government affects Italy’s commitment to meet its EU recovery fund targets, which call for reforms to unlock about 200 billion euros ($201 billion) in grants and loans. Moody’s Investors Service cut Italy’s outlook to negative on Aug. 6, citing an increase in political and policy uncertainty after the end of the Mario Draghi government and due to fallout from Russia’s invasion of Ukraine.
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