Italy Completes Just €3.7bn In EU Projects

The Recovery and Resilience Facility, the €577 billion fund the EU set up in 2021 after Covid, has a hard stop on 31 August 2026. After that date, new milestones no longer count. By 30 September, all payment requests must be filed. Any money left unused is gone. So far, about 58% of the fund has been paid out to governments (European Commission, ING Think).

The real problem is what happens after Brussels sends the money. A government can receive EU funds, tick formal targets, and still fail to turn that money into a hospital, a school, a road, or help for a small business. For Malta, where EU funds are domestic policy in practice, that distinction matters.

Italy collected the cash. The projects didn't follow.

Italy is the clearest case. Rome has received €166 billion, or 85% of its €191 billion allocation, the largest in the EU (Italian government). Yet Italy's Court of Auditors found only €3.7 billion in completed projects (upday, Il Resto del Carlino).

The rest is stuck somewhere in the administrative chain. Thousands of small municipalities received funding but do not have enough staff to run procurement, supervise contracts, and push projects to completion. The divide is sharpest in the south: Sicily has a 22% payment rate and Calabria 25%, compared with 47% in Veneto (Il Foglio).

That administrative shortage has collided with a physical one. Construction costs have risen 40% since 2022, while the EU grants behind these projects were priced in 2021 (Legacoop Romagna). Contractors bid for a school renovation at one price, then find that materials have consumed the budget before the roof is finished.

The result was 13,500 insolvency proceedings in Italy's construction sector in 2025 (Unioncamere). Every failed contractor leaves a public works project behind it, and every stalled project turns an EU payment into a line on paper rather than a building people can use.

Further east, the picture is worse. Hungary has received only 9% of its €10.4 billion, with €9.5 billion frozen over rule-of-law disputes (Portfolio.hu). Romania faces potential penalties of €15 billion, with 38 milestones still unmet (DCNews). Bulgaria has absorbed only 53% after seven governments since its plan was approved.

Survival by shrinking ambitions

The countries that look more successful have often survived by cutting back what they promised. Portugal avoided losing €2 billion by reprogramming its plan three times, dropping Lisbon and Porto metro lines, halving housing targets, and cutting healthcare beds by 40% (Eco/Sapo, Observador).

It also channelled €964 million into a development bank whose loan programmes count as "executed" once contracts are signed, not once projects are finished (Conta-la.pt). Portugal's own oversight body put the question bluntly: "Are we sacrificing impact?"

Greece, which has drawn 68.5% of its €36 billion package, faces another kind of squeeze. Demand for its cheap RRF loans, carrying interest rates of 0.3–1%, exceeds supply by €6–8 billion (News247). Once those loans stop, businesses will face market rates three to four times higher (Protothema).

A flaw baked into the design

The European Court of Auditors identified the central weakness: the RRF pays for milestones, not actual costs. If a milestone is formally met, there is no mechanism to take money back later because the underlying investment was never completed (ECA Special Report 13/2024, eucrim).

That design rewards paperwork before delivery. It also assumes that national administrations can turn formal targets into functioning projects at speed. Bruegel, the Brussels-based economics think tank, has noted that performance-based payments require strong institutions (Bruegel).

This is where the fund's logic starts to strain. Romania, Bulgaria, and Hungary are among the countries most in need of transformation, yet they also have some of the weakest administrative systems. The RRF was meant to narrow gaps inside the EU. In practice, it has often exposed and repeated them.

The European Fiscal Board estimates that RRF grants added about 0.25% of GDP a year to EU public investment, a boost that disappears in 2027 with no replacement in place (European Fiscal Board). The next EU budget cycle begins in 2028, and negotiators have not agreed whether a permanent investment tool should exist at all.

The remaining question is how much money will vanish at the deadline, and how visible the hole will be once the EU's post-Covid fund stops flowing.