
Bungled EU fund deflates Italian nursery hopes, in blow to Meloni
ROME, Feb 20 (Reuters) - When Italian Prime Minister Giorgia Meloni took office in 2022 she inherited a double whammy - the country not only had a worryingly low birthrate, but also low female employment levels.
In an effort to help reverse both trends and boost economic growth, Meloni promised a birth support plan and pledged to create more affordable childcare, confident that this would ease worries about the cost of having babies, and free up mothers to enter the workplace.
But things have not gone to plan, with the twin curses of Italian bureaucracy -- red tape and administrative delays -- forcing Meloni's government to hastily downgrade the project.
The funding is coming from a pool of 194.4 billion euros ($203 billion) in cheap loans and grants that the EU offered Italy to help it recover from the COVID pandemic. The catch is that the money is supposed to be allocated by the end of the spending plan in 2026 and Italy has already revised its programme four times.
Slow spending of the EU funds, a perennial problem in Italy, is one of the reasons analysts say the Italian economy grew a measly 0.5% last year against a government forecast of 1.9% drawn up in 2022, when hopes were high that Italy could leverage the financing to the full.
Economists warn that Italy's already fragile growth outlook will slide further unless it manages to reverse its low birthrate and boost the number of women in the workforce.
Much of the groundwork for the nursery plan had been laid by the previous government led by Mario Draghi, which in 2021 had earmarked some 4.6 billion euros ($4.80 billion) from the EU COVID funds to spend on kindergarten and pre-school projects with the aim of creating 264,480 new places for infants.
Meloni has already slashed the target for new places by more than 100,000 while cutting the funding to 3.2 billion euros, and the state budget watchdog UPB warned last month that the goal might be cut by a further 17,400 places, with time rapidly running out for the government to either spend the EU money or lose it.
"The big flaw in the management of these funds was that Italy did not want to acknowledge until the last minute that many projects cannot be closed on time," said Marco Leonardi, an economics professor at Milan's Statale University and a former aide to Draghi.
'SPEND ALL THE MONEY'
Meloni is negotiating a fifth, final revision of the original EU fund programme with Brussels and local authorities are afraid that more of the promised childcare facilities will get the chop, deemed too bogged down to hit the tight deadline.
"If administrators are afraid of losing funds, they only have to do one thing: close the tender procedures, do it quickly and spend all the money," EU Affairs Minister Tommaso Foti told Reuters.
The Treasury aimed to spend just over half of the 194.4-billion COVID windfall by the end of 2024, but Foti said just 64 billion had been invested so far.
Underscoring the need for action, consumers' union Altroconsumo said in a 2024 report that Italy's less developed southern regions had places for only 16% of local children, while in Italy as a whole, average coverage was just 28%.
By contrast, the European Union average was 37.9%, with neighbours France and Spain achieving a rate of above 50%.
Some towns and cities have already been forced to revise their initial nursery plans and complain that the complexity of applying for, and then disbursing the EU funds, has made it extremely difficult to meet the demanding timetables.
"Fear is always just around the corner ... Every time the government revises the (EU funds) spending plan, it scares those who are not up to speed with the timetable," said Giovanna Bruno, the mayor of the southern city of Andria.
Bruno, whose city has around 100,000 residents, is set to build two new child facilities using the EU funds, but she was forced to cut off an already planned project after the government reviewed previously agreed financing terms.
LOW FEMALE EMPLOYMENT
Luca Dal Poggetto, an analyst at think tank OpenPolis, said the influx of EU funds meant low-staffed local administrations had to manage around 40% more money than they were used to, making it hard for them to cope with the challenge.
"They proved incapable of applying for the projects, and some of those submitted were not suitable to obtain the funding," he told Reuters.
But the stakes are high for Italy to rectify its childcare provision. Its demographics are the worst in Europe in terms of economic growth potential between 2023 and 2040, Scope Ratings said last October, with births in Italy falling for a 15th consecutive year in 2023.
That same year, the female employment rate in Italy was just 56.5%, the lowest in the EU.
These statistics make it imperative for Italy to respond, analysts say.
"Increasing nursery schools helps get more women into the labour force," Milan economics professor Leonardi told Reuters.
"This is crucial to boost economic growth and ensure that there are enough workers to support a growing army of pensioners who also need the state for costly health services."
($1 = 0.9587 euros)

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Reuters
22 minutes ago
- Reuters
Activist hedge fund Parvus builds stake in Novo Nordisk, FT reports
June 9 (Reuters) - Activist hedge fund Parvus Asset Management is building a stake in Novo Nordisk ( opens new tab, after the company lost its first mover advantage in the lucrative weight-loss drug market, the Financial Times reported on Monday, citing people with knowledge of the details. The London-based fund, which has targeted budget airline Ryanair (RYA.I), opens new tab and Italian bank UniCredit ( opens new tab, wants to influence the appointment of Novo Nordisk's new CEO, the report said. Novo told Reuters in an email that it does not "have anything to add." Parvus did not immediately respond to a request for comment. In May, the company announced its CEO Lars Fruergaard Jorgensen would step down after shares plunged from a record-high in June last year as competition, particularly from U.S. rival Eli Lilly (LLY.N), opens new tab, makes inroads into Novo's market share, while its pipeline of new drugs has failed to impress investors. Novo also expects its Wegovy weight-loss drug sales in the United States to start recovering once a ban on compound copycats is enforced this month, Jorgensen said last month after the company cut its 2025 forecasts.


Reuters
33 minutes ago
- Reuters
Canada's Allied Gold could look at options for power supply deal at Sadiola mine
TORONTO, June 9 (Reuters) - Canadian miner Allied Gold could look at alternative options for a power supply deal at its Sadiola mine in Mali following a surge in gold prices and the emergence of new opportunities, its CEO told Reuters in an interview on Monday. The gold miner signed an agreement in February with UAE-based Ambrosia Investment, giving Ambrosia a 50% stake in the mine in return for installing a new power supply system that would have improved the mine's costs. Allied Gold was also supposed to receive $500 million, with approximately $250 million in upfront cash consideration from Ambrosia. The deal is yet to close. Allied Gold CEO Peter Marrone said the deal may close in June, but if it does not, it is because other options have become available to the company. "Our position in the country has changed dramatically along with gold prices," Marrone said. "The world has changed since we put the deal together." Gold prices have surged nearly 30% this year to date and hit a record $3,500.05 per ounce on April 22. Ambrosia Investment did not immediately respond to a request for comment. Marrone said the universe of power solutions for the company changed dramatically after Allied Gold signed a new mining convention with the Mali government last year. Mali is Africa's third-largest gold producer and the military-led government wants to increase revenue from the mining sector. The government believes current arrangements are unfair and has said that foreign multinationals must comply with its demands if they want to continue operating. The country is in dispute with another Canadian miner, Barrick Mining, which is the only gold miner that has not signed Mali's new mining code. Allied Gold said it took a pragmatic approach to settling with the government. "We looked at how best we can deliver returns to our investors, and came to the conclusion that let's take an action based on cooperation and support," Marrone said. Allied Gold, already listed in Toronto Stock Exchange, began its dual listing on Monday on the New York Stock Exchange.


The Independent
33 minutes ago
- The Independent
Canada plans to hit NATO spending target early and reduce reliance on US defense, Carney says
Canada will meet NATO's military spending guideline by early next year and diversify defense spending away from the United States, Prime Minister Mark Carney said Monday, asserting that Washington no longer plays a predominant role on the world stage. The announcement means Canada will achieve NATO's spending target of 2% of gross domestic product five years earlier than previously planned. 'Our military infrastructure and equipment have aged, hindering our military preparedness," Carney said. 'Only one of our four submarines is seaworthy. Less than half of our maritime fleet and land vehicles are operational. More broadly, we are too reliant on the United States.' According to NATO figures, Canada was estimated to be spending 1.33% of GDP on its military budget in 2023, below the 2% target that NATO countries have set for themselves. Canada previously said it was on track to meet NATO's target by the end of the decade. 'Our goal is to protect Canadians, not to satisfy NATO accountants,' Carney said. Canada is about to host U.S. President Donald Trump and other leaders at a summit of the Group of Seven leading industrialized nations in Alberta on June 15-17, and before the NATO summit in Europe. NATO allies are poised to increase the commitment well beyond the 2% target. NATO Secretary-General Mark Rutte said last week that most U.S. allies at NATO endorse Trump's demand that they invest 5% of gross domestic product on their defense needs and are ready to ramp up security spending even more. Carney has said he intends to diversify Canada's procurement and enhance the country's relationship with the EU. 'We should no longer send three-quarters of our defense capital spending to America,' Carney said in a speech at the University of Toronto. 'We will invest in new submarines, aircraft, ships, armed vehicles and artillery, as well as new radar, drones and sensors to monitor the seafloor and the Arctic.' Canada has been in discussions with the European Union to join an EU drive to break its security dependency on the United States, with a focus on buying more defense equipment, including fighter jets, in Europe. Carney's government is reviewing the purchase of U.S. F-35 fighter jets to see if there are other options. 'We stood shoulder to shoulder with the Americans throughout the Cold War and in the decades that followed, as the United States played a predominant role on the world stage. Today, that predominance is a thing of the past,' Carney said in French, one of Canada's official languages. He added that with the fall of the Berlin Wall in 1989, the United States became the global hegemon, noting that its strong gravitational pull became virtually irresistible and made the U.S. 'our closest ally and dominant trading partner.' 'Now the United States is beginning to monetize its hegemony: charging for access to its markets and reducing its relative contributions to our collective security,' Carney said. Trump's calls to make Canada the 51st U.S. state have infuriated Canadians, and Carney won the job of prime minister after promising to confront the increased aggression shown by Trump. The prime minister said "a new imperialism threatens.' 'Middle powers compete for interests and attention, knowing that if they are not at the table, they will be on the menu," Carney said. Carney said the long-held view that Canada's geographic location will protect Canadians is increasingly archaic. European allies and Canada have already been investing heavily in their armed forces, as well as on weapons and ammunition, since Russia launched a full-scale invasion of Ukraine on Feb. 24, 2022.