The EU could cut the PNRR funds to Italy. The reason? The economy is doing better than expected

While waiting to make known its opinion on the first package of Italian projects of the Next Generation Eu, on which the disbursement of the new tranche of financing depends, the European Commission has announced that Italy could see its overall funds reduced for the Pnrr. The reason? The economy is doing better than expected. A news that has already triggered the controversy, with the leader of the Lega Matteo Salvini talking about “unacceptable provocation”.

In reality, any Brussels cuts would not be a discretionary act, but derive from the rules with which the allocations to individual countries were calculated, which favored those most affected by the economic crisis resulting from the first wave of Covid-19, in particular Italy. and Spain. These loans (approximately 190 billion for our country, of which 68 billion non-repayable) had been calculated on the basis of forecast data, and as such fallacious, especially with the uncertainty caused by the pandemic. And the regulation signed by all 27, it provided for the possibility of reviewing the allocations on the basis of the economic trend.

After all, observes the chief spokesman Eric Mamer, “it is good news that the economy of a country” like Italy “is doing well: it should not be forgotten that the aim of our policy is for the economy to recover”. Indeed, explains Nuyts, “for the maximum final allocation, the regulation provides that the current maximum allocation for grants is indicative, as 30% is subject to change, in accordance with the decisions taken by the Council and Article 11.2 of the regulation “. This is because the so-called Recovery Fund “was adopted at a time when economic uncertainty was very high”, therefore “it was decided to make the decision on the longer-term final maximum allocation”.

This means that the allocation of transfers “will be recalculated by 30 June 2022 at the latest, in order to determine the final maximum financial contribution for each Member State”. The new calculation, explains Nuyts, will replace the forecast data for autumn 2020 (those of the Commission) “with the real results of the variation in GDP in 2020 and also the aggregate variation in GDP in the period 2020-2021”. However, when the final figure is lower than the initial one, a Member State has “several options” available to compensate for the cuts.

First of all, there is the possibility of presenting “a revised plan” that provides for the transfer of funds “from other EU resources, such as cohesion funds”, based on article 7 of the regulation. A second possibility is to remedy by using “national funds”. A third possibility is to submit a “revised plan”, including a “loan application”, which can be done by August 31, 2023. The maximum amount of loans that can be requested is 6.8% of the Gross national product of the requesting state. If this threshold has already been reached, however, “no more loan applications can be made”, which are very convenient because the Commission finances itself on the markets at very low rates, which ‘passes’ to the States without earning additional interest.

In all three cases, of course, Italy would still lose a part of the much more attractive non-repayable subsidies (which unlike the loans will not be repaid). “This is not the time for provocations. In a phase of geopolitical, energy, logistics and rising cost of raw materials, even assuming cuts in European funds destined for Italy is unacceptable”, Salvini thundered. We will see how it ends. But in Brussels there are those who quote a motto coined by the Roman jurists: “Pacta sunt servanda”.