Italy is seeking a further 16 billion euros in post-COVID EU funds while it continues to wait for payment of the previous instalment, the country’s European Affairs Minister Raffaele Fitto announced yesterday.

Describing the hold-up in securing the money as “clearly a problem,” Economy Minister Giancarlo Giorgetti acknowledged that public finances were facing rising challenges.

“We are monitoring (public finances), we have targets to meet and we will meet them,” Giorgetti said, reiterating that the Treasury has no plans to change its guidance for the issuance of medium-to long-term sovereign bonds in 2023.

Italy is to receive 191.5 billion euros in grants and cheap loans through 2026 from the EU Recovery and Resilience Facility (RRF), a unique opportunity to revitalise its sluggish economy.

But the Rome government is struggling to keep pace with deadlines for spending the cash it has already received. Nor has it been meeting all the designated “targets and milestones” set for the release of fresh payments.

The third instalment – 19 billion euros — that Italy still awaits is linked to dozens of goals, which should have been met in the second half of 2022.

Meanwhile, European Affairs Minister Fitto said there was no guarantee that the requested fourth tranche would be received by the end of the year. To trigger release of the sought-after funds, Rome has asked the EU to review almost a third of the 27 goals that need to be met.

The state sector borrowing requirement, a narrower aggregate than the public sector deficit, stood at 95 billion euros at the end of June, up more than 50 billion euros on last year.

This year, the government is targeting a budget deficit of 4.5% of gross domestic product (GDP), almost half of last year’s 8.0%. Should it drop to a projected 3.7% of GDP next year, the deficit could return to the EU 3% ceiling in 2025.