Connect with us

Hi, what are you looking for?

Economy

Italian mafia targets Europe’s crisis recovery fund

CRIMINAL ENTERPRISES — like their legitimate counterparts — have suffered during the economic crisis caused by the pandemic. But the Italian mafia has already laid the foundation for a massive payday.

Last year, when countries were seized by lockdowns, the mafia started infiltrating cash-starved companies in a bid to siphon money from the European Union’s (EU) recovery fund and the 1.8 trillion euros ($2.2 trillion) that will, in part, start flowing to struggling firms later this year, according to Maurizio Vallone, Italy’s top investigator on organized crime.

Criminal groups including the N’drangheta in the southern Calabria region and Cosa Nostra in Sicily have sought to gain footholds in lawful businesses that will be first in line to get EU aid, such as those in environmental and digital sectors, said Mr. Vallone of the Antimafia Investigative Directorate, which groups investigators from the main police forces.

“The mafia has been choosing the companies that are best-placed to take part in recovery fund tenders, especially in the health and infrastructure sectors where a great deal of money will be spent,” Mr. Vallone told Bloomberg at his Rome office on Tuesday. “It will try to take everything. We have to make sure they don’t get even one euro.”

And Italy is a prime target for criminals since it’s poised to be the largest recipient of EU grant money.

The new government of Prime Minister Mario Draghi is drafting a spending plan for its 209 billion-euro share of the EU funds as it struggles to shake off the worst recession since World War II. Italian firms are particularly vulnerable since a scheme for state-guaranteed bank loans has been too complex and limited to be effective, said Mr. Vallone.

As a result, companies that have shaky credit-worthiness have benefited little from state help, he said.

Mafia gangs have seized on the opportunity, with regional and national lockdowns, to reach out to small and medium-sized companies desperate for liquidity in an economy that contracted 8.9% last year.

Mafiosi typically seek to muscle in on a firm’s share capital, fund struggling businesses through usury, or exploit them through a hidden partner, Mr. Vallone said. The number of suspicious financial operations reported by the Bank of Italy increased by 7% last year to 113,000. “That makes us strongly suspect that there is organized crime interest,” he said.

The European Anti-Fraud Office didn’t immediately return an email seeking comment.

NEW CHECKS
Mr. Vallone wants tighter anti-mafia checks on public works. Under the current system, police forces assess the winner of a tender before a project begins. Under a proposal Mr. Vallone said he will send to the interior ministry later this month, anti-mafia investigators would automatically monitor money transfers as well as sub-contractors and suppliers for the duration of the project.

“The recovery fund is the priority, but this procedure should apply to all public works contracts,” Mr. Vallone said.

Stricter rules are needed also because of pressure from Brussels. “The European Commission doesn’t wait for the biblical time-spans of traditional public tenders, it wants to give the money and see the results within a reasonable period,” said Mr. Vallone.

There may well be a downside to more anti-mafia checks however. Italy, plagued by red tape, already fails to spend much of the structural funds it receives from the EU. The country had used only 30.7% of allocated funds at the end of 2019, according to an EU report, compared to 66.2% for leader Finland, and an average for the bloc of 39.6%. More controls could risk stalling recovery money too.

In the Sicilian capital Palermo, many are facing a stark choice, according to Patrizia Di Dio, head of the local, 13,000-strong branch of the Confcommercio business lobby.

“When a businessman cannot any longer support even his own family, he’ll find organized crime ready for him with its doors wide open,” Ms. Di Dio said. “If the state wants to protect the legal economy, it should make loans more accessible, and it should suspend taxes. It’s crazy and hypocritical not to help you, and to threaten you with taxes at the same time.” — Bloomberg

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

Follow us on Spotify BusinessWorld B-Side Despite saying that the pandemic response is a top priority, the executive department of the Duterte administration slashed the P50.4...

Economy

Wilcon Depot celebrates the successful opening of its newest retail store in Pila, Laguna, as part of its ongoing #FlyingHighTo100 store expansion campaign. Opened...

Economy

As climate change takes center stage as one of the world’s most pressing challenges, and countries race to transition from fossil fuels to clean energy...

Economy

Willis Towers Watson shares the secret to its successful 40 years of providing world-class advisory, broking services and business solutions The COVID-19 pandemic has...

Economy

The coronavirus pandemic has continued to dampen the demand for residential property, particularly in Metro Manila. — PHILIPPINE STAR/ MICHAEL VARCAS By Luz Wendy...

Economy

1 of 2 The reconstruction of the iconic Grand Mosque is part of the rehabilitation works in Marawi. — COURTESY OF DEPARTMENT OF HUMAN...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Economy

US President Joseph R. Biden, Jr., will rely on ally countries to supply the bulk of the metals needed to build electric vehicles and focus on...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.



Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!