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Italy set to spend €260bn to rescue battered economy after pandemic

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By Euronews
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Italy set to spend €260bn to rescue battered economy after pandemic
Copyright  Mark Schiefelbein/Copyright 2020 The Associated Press. All rights reserved
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Italy is aiming to mobilise €260 billion as part of its national recovery plan, as it looks to kickstart its economy after being hit hard by the pandemic and years of stagnation.

The European Union will provide €191.5 billion from its Recovery and Resilience Facility - designed to mitigate the impact of the coronavirus crisis - making Rome the largest recipient of EU funds.

This total includes €122.6 billion in loans and €68.9 billion in grants.

In order to access this money, every member state must spend at least 37% in investments and reforms that support climate objectives, and 20% towards the digital transition.

Italy has decided to dedicate 38% and 25% to both of these respectively.

One of the main goals of Italy's plan is to reverse two decades of decline in its industrial sector, the causes of which are linked to an outdated infrastructure, especially when it comes to public administration.

According to Valentina Meliciani, director of the Luiss School of European Political Economy, stepping up the digitalisation of this area could offer the opportunity to revitalise the way things are done.

"There's a real effort, in this case, to overcome some obstacles [through digitalisation], as far as public administration is concerned, as well as for the judicial system, and boosting competition," Meliciani told Euronews.

The recovery plan reserves €30.6 billion of projects to boost the country's infrastructure, in order to improve connectivity and efficiency, including for high-speed trains.

Meliciani said that no other European country has such a clear difference between the developed north and the underdeveloped south, adding that the rescue package has the real opportunity to bridge this gap.

"In the plan, the most important thing is the effort towards social and territorial cohesion. We live in a country that suffers a lot from a north-south divide and in this plan, there are huge resources that should ultimately benefit southern Italy more so than the rest of the country," Meliciani told Euronews.

The Italian government says that it expects the huge injection of cash to boost economic output by 3.6% by 2026.