(Bloomberg) -- Italy's government gave its final approval to a package worth about 260 billion euros ($315 billion) to salvage the economy and address longstanding structural issues, drawing chiefly on European Union funds.
A cabinet meeting hosted by Prime Minister Mario Draghi backed the recovery plan, which is due to be sent to Brussels by a Friday deadline, according to officials, who declined to be named on a confidential issue.
The blueprint drafted by Draghi draws heavily on Italy's share of grants and loans under the EU's pandemic recovery fund, the largest portion allotted to a single country. The ex-head of the European Central Bank is counting on the funds to jump-start an economy that contracted 9% last year under the weight of the virus outbreak and a series of lockdowns.
The new plan, which includes a 30.6 billion-euro Italian state fund for infrastructure projects, also sets out ambitious deadlines for reforms to boost competition, cut red tape, speed up the judicial system, and reduce gender inequality.
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The package allocates about 40% of Italy's share of EU funding to green programs and 25% to digital projects, with priorities including infrastructure and high-speed trains.
The government estimates that the plan will boost economic output by about 3.6% by 2026. The recovery plan comes on top of over 170 billion euros in economic stimulus passed by Italian governments since the start of the pandemic last year.
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