ROME The European Commission said on Friday it had provisionally approved the payment to Italy of a third tranche of 18.5 billion euros ($20.43 billion) in post-COVID recovery funds.

The approval of the money had been blocked in March due to Rome's failure to meet previously agreed policy conditions.

The release of the funds will still take some time.

The Commission said in a statement that its provisional assessment now needs to obtain a green light from a panel of EU finance officials (EFC) within four weeks, before final approval from Brussels and the transfer of the money.

Italy is behind schedule both in approving the policy "targets and milestones" agreed with the Commission and also in spending the money it has actually received.

"The European Commission strongly encourages all member states, including Italy, to proceed with the timely implementation of their respective recovery and resilience plans," it added.

Prime Minister Giorgia Meloni welcomed the announcement and reiterated Rome's commitment to securing all 35 billion euros in post-COVID funds scheduled for this year.

Italy is due to receive some 191.5 billion euros in EU cheap loans and grants through 2026.

($1 = 0.9056 euros)

(Reporting by Giuseppe Fonte, editing by Gavin Jones)