
Bungled EU fund deflates Italian nursery hopes, in blow to Prime Minister Meloni
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 per cent last year against a government forecast of 1.9 per cent 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.
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 per cent of local children, while in Italy as a whole, average coverage was just 28 per cent.
By contrast, the European Union average was 37.9 per cent, with neighbours France and Spain achieving a rate of above 50 per cent.
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.
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 per cent 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 per cent, 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."
Hashtags

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


Gulf Today
2 hours ago
- Gulf Today
China's export growth slows last month as tariffs take toll
China's export growth slowed to a three-month low in May as US tariffs slammed shipments, while factory-gate deflation deepened to its worst level in two years, heaping pressure on the world's second-largest economy on both the domestic and external fronts. US President Donald Trump's global trade war and the swings in Sino-US trade ties have in the past two months sent Chinese exporters, along with their business partners across the Pacific, on a roller coaster ride and hobbled world growth. Underscoring the US tariff impact on shipments, customs data showed that China's exports to the US plunged 34.5 per cent year-on-year in May in value terms, the sharpest drop since February 2020, when the outbreak of the COVID-19 pandemic upended global trade. Total exports from the Asian economic giant expanded 4.8 per cent year-on-year in value terms last month, slowing from the 8.1 per cent jump in April and missing the 5.0 per cent growth expected in a Reuters poll, customs data showed on Monday, despite a lowering of US tariffs on Chinese goods which had taken effect in early April. 'It's likely that the May data continued to be weighed down by the peak tariff period,' said Lynn Song, chief economist for Greater China at ING. Song said there was still front-loading of shipments due to the tariff risks, while acceleration of sales to regions other than the United States helped to underpin China's exports. Imports dropped 3.4 per cent year-on-year, deepening from the 0.2 per cent decline in April and worse than the 0.9 per cent downturn expected in the Reuters poll. Exports had surged 12.4 per cent year-on-year and 8.1 per cent in March and April, respectively, as factories rushed shipments to the US and other overseas manufacturers to avoid Trump's hefty levies on China and the rest of the world. While exporters in China found some respite in May as Beijing and Washington agreed to suspend most of their levies for 90 days, tensions between the world's two largest economies remain high and negotiations are underway over issues ranging from China's rare earths controls to Taiwan. Trade representatives from China and the US are meeting in London on Monday to resume talks after a phone call between their top leaders on Thursday. China's imports from the US also lost further ground, dropping 18.1 per cent from a 13.8 per cent slide in April. Zichun Huang, economist at Capital Economics, expects the slowdown in exports growth to 'partially reverse this month, as it reflects the drop in US orders before the trade truce,' but cautions that shipments will be knocked again by year-end due to elevated tariff levels. China's exports of rare earths jumped sharply in May despite export restrictions on certain types of rare earth products causing plant closures across the global auto supply chain. The latest figures do not distinguish between the 17 rare earth elements and related products, some of which are not subject to restrictions. A clearer picture of the impact of the curbs on exports will only be available when more detailed data is released on June 20. China's May trade surplus came in at $103.22 billion, up from the $96.18 billion the previous month. Other data, also released on Monday, showed China's imports of crude oil, coal, and iron ore dropped last month, underlining the fragility of domestic demand at a time of rising external headwinds. Beijing in May rolled out a series of monetary stimulus measures, including cuts to benchmark lending rates and a 500 billion yuan low-cost loan programme, aimed at cushioning the trade war's blow to the economy. China's markets showed muted reaction to the data. The blue-chip CSI300 Index climbed 0.29 per cent and the benchmark Shanghai Composite Index was up 0.43 per cent. Producer and consumer price data, released by the National Bureau of Statistics on the same day, showed that deflationary pressures worsened last month. The producer price index fell 3.3 per cent in May from a year earlier, after a 2.7 per cent decline in April and marked the deepest contraction in 22 months. Cooling factory activity also highlights the impact of US tariffs on the world's largest manufacturing hub, dampening faster services growth as suspense lingers over the outcome of US-China trade talks. Retail sales growth slowed last month as spending continued to lag due to job insecurity and stagnant new home prices. These headwinds were evident in China's car sales for May, which grew 13.9 per cent year-on-year, slowing from a 14.8 per cent increase the previous month, data from the China Passenger Car Association showed. Sluggish domestic demand and weak prices have weighed on China's economy, which has struggled to mount a robust post-pandemic recovery amid a prolonged property slump and has relied on exports to underpin growth. Reuters


Zawya
5 hours ago
- Zawya
EU ban on Air Tanzania flights could crush London plan
The European Union's decision to ban all Tanzania-registered aircraft from operating in its airspace has raised concerns about the effectiveness of the Tanzania Civil Aviation Authority (TCAA) and cast a shadow over the country's aviation and tourism sectors. Announced on June 3 in the EU's latest update to its Aviation Safety List, the ban cites 'serious deficiencies in national aviation oversight' as the reason for blacklisting all Tanzanian carriers. Suriname was also included on the revised list. While no Tanzanian airline currently operates flights to Europe, the implications of the ban are far-reaching, especially for Air Tanzania's plans to expand its long-haul network. Air Tanzania's dream of launching direct flights between Dar es Salaam and London's Gatwick Airport could have been dashed by the stance taken by the European bloc. The Tanzanian flag carrier had long planned the Gatwick route as part of its broader ambition to expand its long-haul network from Dar es Salaam, which includes routes to Guangzhou, China, and Mumbai, India. The ban, issued by the European Commission's directorate-general for mobility and transport, also applies to the United Kingdom — despite its exit from the EU — as the UK continues to honour aviation safety advisories from Brussels.'Passenger safety remains our top priority. Following a detailed technical assessment, the European Commission has added all air carriers certified in Suriname and Tanzania to the EU Air Safety List due to serious deficiencies in national aviation oversight,' said Apostolos Tzitzikostas, the EU Commissioner for Transport.'We urge both countries to address these issues promptly. The Commission stands ready to support their efforts toward full compliance with international safety standards.'The Commission did not specify the exact deficiencies found in the TCAA's oversight or cite any particular safety violations by the affected airlines. While none of the banned Tanzanian airlines currently operate flights to the EU or the UK, the universal ban sets back any plans to enter the market. Air Tanzania, which once flew to Frankfurt, Rome, and Athens, had hoped to re-enter the European market as part of its turnaround strategy. According to its in-flight publication, Twiga Magazine, ATCL had planned to launch direct flights to Gatwick—London's second busiest airport—as early as this year. The airline announced that it had secured three weekly landing slots at Gatwick in June 2024, with plans to operate two flights a week from Dar es Salaam and one from Kilimanjaro. The EU ban now slams the brakes on these plans, casting doubt on Air Tanzania Company Ltd's long-term recovery strategy, which relies heavily on expanding into long-haul and intercontinental markets. The regional market, meanwhile, remains highly competitive, with dominant players such as Ethiopian Airlines and Kenya Airways crowding out smaller carriers. The London route has long been considered a lucrative one. Ethiopian, KQ, Uganda Airlines, and RwandAir all operate direct flights to the UK capital. Air Tanzania joins a list of African national carriers currently banned from the EU: Air Zimbabwe, Congo Airways (DRC), Eritrean Airlines, Air Libya, and Sudan Airways. While the EU updates its Air Safety List regularly, it remains unclear when Tanzanian carriers might be removed, or how long the restrictions will last. Industry analysts say the ban reflects a broader failure in aviation oversight.'It raises questions about TCAA's capacity to enforce safety standards and uphold international regulatory expectations,' one expert observed. The EU's action follows a partial ban imposed in December 2023 that targeted Air Tanzania specifically. At the time, officials from the European Commission and aviation experts were in Tanzania to assist both the Tanzania Civil Aviation Authority and Air Tanzania in closing identified safety gaps. Those efforts now appear to have fallen short. Concerns raised by the EU reportedly included the operation of aircraft beyond mandated maintenance intervals, staffing shortages in key technical departments, and weaknesses in the regulator's independence. For Air Tanzania, the impact is particularly significant. The national carrier operates three Boeing 787-8 Dreamliners—long-haul aircraft whose potential remains underutilised due to limited access to international markets. The airline has been working toward securing a Third Country Operator (TCO) certification, a prerequisite for launching flights to London Gatwick. Although the United Kingdom is no longer part of the EU, the UK Civil Aviation Authority typically aligns with EU safety assessments in its own decisions.'If Air Tanzania cannot access European destinations, it weakens its business case for operating wide-body aircraft, which are capital-intensive assets,' the analyst added. 'This affects not only revenue projections but also the airline's ability to participate fully in international partnerships and interline agreements.'From an operational safety standpoint, Air Tanzania remains a member of the International Air Transport Association (IATA) and holds a current IOSA (IATA Operational Safety Audit) certification — widely regarded as the industry's gold standard. The EU ban may therefore reflect shortcomings more on the regulator's side than the airlines. Still, the road to reinstatement could be long. Without demonstrable progress in meeting international standards, Tanzania risks further isolation from global aviation networks — affecting not only its flag carrier but the broader ecosystem of tourism, trade, and investment that depends on strong and credible air connectivity. © Copyright 2022 Nation Media Group. All Rights Reserved. Provided by SyndiGate Media Inc. (


Gulf Today
a day ago
- Gulf Today
Weekly jobless claims hit 7-month high; imports post record decline
The number of Americans filing new applications for unemployment benefits increased to a seven-month high last week, pointing to softening labour market conditions amid mounting economic headwinds from tariffs. The report from the labour Department also continued to show workers losing their jobs having a tough time landing new opportunities as uncertainty caused by President Donald Trump's aggressive trade policy leaves employers reluctant to increase headcount. The data included the Memorial Day holiday, which economists said could have caused difficulties with the seasonal adjustment and likely contributed to the second straight weekly increase in unemployment claims. Still, they said the report offered some evidence of labour market strains. 'We won't dismiss the rise in claims over the last two weeks, which may be signaling weakening labour market conditions in response to the Trump administration's tariff policies and uncertainty,' said Nancy Vanden Houten, lead US economist at Oxford Economics. 'However, seasonal quirks might have contributed to the rise in claims.' Initial claims for state unemployment benefits rose 8,000 to a seasonally adjusted 247,000 for the week ended May 31, the highest level since last October. Economists polled by Reuters had forecast 235,000 claims for the latest week. With the start of the school holidays this month, claims could remain elevated as some states allow non-teaching staff to collect benefits. There were notable rises in unadjusted claims in Kentucky and Tennessee, likely related to layoffs in the motor vehicle industry amid duties on imported parts. Claims surged in the prior week in Michigan, attributed to layoffs in the manufacturing industry. But companies are generally hoarding workers after struggling to find labour during and after the COVID-19 pandemic. The Federal Reserve's Beige Book report on Wednesday showed 'comments about uncertainty delaying hiring were widespread,' noting that 'all districts described lower labour demand, citing declining hours worked and overtime, hiring pauses and staff reduction plans.' It said while some districts reported layoffs in certain sectors, 'these layoffs were not pervasive.' Stocks on Wall Street were higher. The dollar was steady against a basket of currencies. US Treasury yields rose. The number of people receiving benefits after an initial week of aid, a proxy for hiring, slipped 3,000 to a seasonally adjusted 1.904 million during the week ending May 24, the claims report showed. The elevation in the so-called continuing claims aligns with consumers' ebbing confidence in the labour market. SLACKENING labour MARKET The claims data have no bearing on the labour Department's closely watched employment report for May, scheduled to be released on Friday, as it falls outside the survey period. Nonfarm payrolls likely increased by 130,000 jobs last month after advancing by 177,000 in April, a Reuters survey of economists showed. The unemployment rate is forecast being unchanged at 4.2%. 'A gradual but genuine slackening of the labour market is underway,' said Oliver Allen, senior US economist at Pantheon Macroeconomics. There was, however, some welcome news on the economy. A separate report from the Commerce Department's Bureau of Economic Analysis showed the trade deficit narrowed sharply in April, with imports decreasing by the most on record as the front-running of goods ahead of tariffs ebbed, which could provide a lift to economic growth this quarter. The trade gap contracted by a record 55.5% to $61.6 billion, the lowest level since September 2023. The goods trade deficit eased by a record 46.2% to $87.4 billion, the lowest level since October 2023. A rush to beat import duties helped to widen the trade deficit in the first quarter, which accounted for a large part of the 0.2% annualized rate of decline in gross domestic product last quarter. The contraction in the deficit, at face value, suggests that trade could significantly add to GDP this quarter, but much would depend on the state of inventories. 'The collapse in the trade gap, although unlikely to be sustained, points to a massive trade addition to GDP growth and, if the offset to the import swing is not measured in inventories, second-quarter measured GDP growth could be eye-popping, possibly in the area of 5%, but as meaningless as the first-quarter's decline in output,' said Conrad DeQuadros, senior economic advisor at Brean Capital. Imports decreased by a record 16.3% to $351.0 billion in April. Goods imports slumped by a record 19.9% to $277.9 billion, held down by a $33.0 billion decline in consumer goods, mostly pharmaceutical preparations from Ireland. Agencies