Italy OKs 'mother of all reforms' to cut red tape

ROME

After an all-night marathon, the Italian Cabinet early Tuesday approved the "simplification decree," a massive legislative package that aims at cutting Italy's notorious red tape, and boosting the country’s ailing economy.

The new legislation is the result of weeks of heated negotiations between the main coalition partners – the 5Star Movement and the center-left Democratic Party – divided over the main measures.

Italian Prime Minister Giuseppe Conte, who dubbed it "the mother of all reforms," acted as a mediator, pushing for the approval of a long-awaited overhaul that covers a range of sectors – from public tenders to corporate rules, abuse of office laws, and public administration’s digitalization process.

The government also pledged that the new rules will allow to unblock 130 strategic infrastructure projects – including bridges, airports, highways – that had been halted due to bureaucratic hurdles.

In a press conference, Conte stressed the importance of such a “revolution,” which is expected to boost Italy’s economy, pushed into a deep recession by the coronavirus pandemic.

According to latest EU Commission forecasts, the Italian output will plunge by 11.2% this year, after a two-month lockdown halted all the main business activities.

“Unfortunately, this is a significant drop and we predicted it. But we don’t have to be scared, the problem is the ability of the country to react and start a relaunch,” Conte said.

Red tape and complex bureaucratic procedures have long been blamed for discouraging foreign investments in Italy, while blocking any innovation project and making business activity almost impossible.

Critics and opposition parties, however, say the new rules won't be enough to solve Italy’s long-standing problems, and accuse the government of having approved an “empty box” that won’t have any real impact.

For the Italian government this new legislation package comes at a key time.

Rome has been struggling to prove to its European partners that it's ready to move forward with structural reforms. It also needs a credible plan on how to spend the possible EU recovery funds designed to help struggling countries face the heavy economic fallout from the pandemic.

The European Council will hold a crucial meeting next week, which is expected to negotiate the €750 billion recovery fund, trying to overcome the resistance of the so-called "frugal countries" that demand long-term reforms in exchange for financial aid.