Italy and the European Union have agreed on ways to unlock around €18.5 billion in EU post-Covid funds, it was announced on Thursday.

According to a government statement, the move would permit Italy to secure the majority of a €19 billion third instalment in EU funds that were frozen by the European Commission back in March. 

European Economic Commissioner Paolo Gentiloni affirmed that Italy would receive the funds "in the coming weeks." 

The release of the funds is associated with 55 policy "targets and milestones" within the country's pandemic Recovery Plan which should have been reached in the second half of 2022. These included the provision of 7,500 additional beds for university students. 

Rome had reported that the student housing project was operating on schedule, but this was rebuffed by Brussels, Reuters reports. 

Italy's prime minister, Giorgia Meloni, said that following discussions with the Commission, the university project would be delayed to a series of objectives linked to a fourth tranche of funds of €16 billion due later this year.

As such, the amount of the third instalment is reduced by around €500 million, whilst the fourth instalment increases by the same amount. 

"The total of €35 billion expected in 2023 will be collected in full," according to the PM's statement. 

Italy is expected to receive €191.5 billion in grants and cheap loans from the EU Recovery and Resilience Facility (RRF) until 2026 to revitalise the economy.

Yet businesses are concerned that bureaucratic incompetence and insufficient expertise are hampering hopes of transforming the country with the funds, the Reuters report adds.

Indeed, according to a report from Standard & Poor's this week, Spain and Italy were way behind schedule on their plans, with estimates just 10% and 20%, respectively, of available grants had been executed at the end of last year.

Italy's prime minister is working on the presentation of a revised plan to present to Brussels next month.