Draghi to set up long-term board to oversee Italy Recovery Plan -draft

Virtual G20 summit on the global health crisis, in Rome
FILE PHOTO: Italian Prime Minister Mario Draghi speaks during a news conference at a virtual G20 summit on the global health crisis, at Villa Pamphilj in Rome, Italy, May 21, 2021. REUTERS/Remo Casilli/Pool

May 27, 2021

By Giuseppe Fonte and Gavin Jones

ROME (Reuters) – Italian Prime Minister Mario Draghi plans to set up a board of technical experts to strictly oversee management of Italy’s five-year Recovery Plan, according to a draft government decree obtained by Reuters.

The decree, set to be approved by the cabinet on Friday, includes emergency measures to streamline bureaucracy and explains how the government will implement investment projects to be funded by the European Union.

Italy is eligible for more than 200 billion euros ($243.76 billion) from the EU’s Recovery Fund, making it the biggest beneficiary of the 750 billion euro kitty set up to help the bloc’s 27 countries recover from the COVID-19 pandemic.

When Rome presented its Recovery Plan last month it promised to rapidly implement legislation on simplification and governance measures, both of which are creating tensions in Draghi’s national unity coalition.

In the near-term, governance will be run by Draghi, key ministers and cabinet undersecretaries, the draft showed.

But with the next election due in 2023 at the latest, the decree also sets up a “technical body” which will “last longer than the government which names it … until the end of the duration of Recovery Plan”, which runs until 2026.

This body will have key functions, including suggesting to the premier when he should overrule any objections to investment projects by those responsible for putting them into practice, in most cases local administrators.

The appointment of the board will ensure the management of the Recovery Plan does not fall prey to Italy’s usual spoils system following a change of government.

The Recovery Plan promised a simplification decree would be approved by May 20, a deadline Draghi failed to meet amid protests from trade unions and coalition parties over an earlier draft. The simplification decree is now to be merged with the governance one.

One of the main objections was against a measure making it easier for firms that win public tenders to issue sub-contracts to carry out the projects, reducing the legal responsibilities of the main contractor.

The government and unions were meeting on Thursday to decide how to resolve the issue.

It remains to be seen how the ruling coalition will respond to the new technical body in managing the Recovery Fund cash.

Since taking office in February, former European Central Bank chief Draghi has shown a tendency to bypass the parties in key nominations.

“Draghi is steadily putting people he trusts in strategic positions and marginalising the role of the parties,” said Massimo D’Antoni, economics professor at Siena University, commenting on Draghi’s appointment of a new chief for state lender CDP earlier on Thursday.

(Editing by Catherine Evans)