In July 2020, the European Council reached an agreement on the new Multiannual Financial Framework 2021-2027 and a fund to ensure Europe’s recovery after the COVID-19 crisis.
The fund, called Next Generation EU, has a total financial capacity of 750 billion euros in loans and grants and it includes a series of instruments, in particular:
The Recovery and Resilience Facility is the core of Next Generation EU, with a total amount of € 672.5 billion for Member States, € 312.5 billion in grants and € 360 billion in loans.
The European Commission will disburse RRF funds to Member States after the approval of the Resilience and Recovery Plans, which they must submit by April 2021. The European Commission specified that Member States have to include in their plans investment and reforms in seven flagship areas:
European Commission’s guidance provided that Member States should dedicate at least 37% of resources for supporting green transition and 20% for measures aimed at accelerating the digital transformation.
Following the presentation of Recovery and Resilience Plan, within 2 months the European Commission will assess the Plan and propose its approval to the Council of the EU. Than the Council has to approve the Plan within 4 weeks by qualified majority. Following the Plan’s approval, Member States will receive a 13% pre-financing of the total amount foreseen for each country.
Italy will be one of the main Next Generation EU beneficiaries and it will receive, from 2021 to 2026, about € 208 billion euros divided in the following way:
On 9 September 2020, the Interministerial Committee on European Affairs (CIAE) approved the proposal of Italian guidelines for the Recovery and Resilience Plan, defining the challenges that the country will face, the priority missions in which all the projects will be divided and the reforms that will be linked to the clusters of intervention.
On 7 December 2020, the Italian Government started the discussion on the updated version of the National Recovery and Resilience Plan. Then, on 12 January 2021, the Council of Ministers adopted the NRRP, which will be discussed with the Italian Parliament, regional and local institutions and civil society before the final approval.
The Plan is divided into 6 Missions, 16 Clusters and 48 Projects and it identifies 3 strategic priorities:
Moreover, the Plan’s resources amount to 222.9 billion euros (more than the funds included in the NRRP guidelines), divided as follows:
The Government decided to include in the Plan also 79.81 billion euros from 2021-2026 budgetary planning and 7.9 billion euros from European Structural Funds, with an overall total of 310.6 billion euros.
Next Generation EU resources will be divided between the 6 missions of the Plan as follows:
On 1 April 2021, the Chamber of Deputies and the Senate voted two Resolutions on the National Recovery and Resilience Plan draft presented by the Conte Government in January, approving the report of the Parliamentary Committees.
On 24 April 2021, the Draghi Government examined NRRP final version, updated on the basis of the recommendations expressed by Parliament. On 26 and 27 April, Prime Minister Mario Draghi held communications to the Parliament in view of NRRP transmission of the PNRR to the European Commission. Following Parliament’s approval, on 30 April the Government sent NRRP to the Commission, respecting the deadline for 13% pre-financing that Italy should receive by the summer.
National Recovery and Resilience Plan’s total resources will amount to 235.1 billion euros, including:
Moreover, 26 billion euros are allocated for specific projects to be completed by 2032.
Finally, about 15.5 billion euros as an advance from 2021-2027 Development and Cohesion Fund (FSC) will be used as additional resources.
The Plan allocates 40% of resources to Southern Italy (approximately 82 billion euros of 206 billion euros allocated on a territorial basis).
Thanks to NRRP implementation, it is expected an increase in GDP of 3.6% and an increase of 3.2% in national level of employment in 2026.
Strategic axes and transversal priorities
The Plan is developed around three strategic axes:
All the Plan’s interventions aim to achieve three transversal objectives:
Missions & Clusters
The Plan is divided into 6 Missions and 16 priority clusters.
40.32 billion euros from RRF plus 8.74 billion euros from national Fund plus 0.80 billion euros from REACT-EU.
59.47 billion euros from RRF plus 9.16 billion euros from national fund plus 1.31 billion euros from REACT-EU.
25.40 billion euros from RRF plus 6.06 billion euros from national fund.
30.88 billion euros from RRF plus 1 billion euros from national fund plus 1.93 billion euros from REACT-EU.
19.81 billion euros from RRF plus 2.77 billion euros from national fund plus 7.25 billion euros from REACT-EU.
15.63 billion euros from RRF plus 2.89 billion euros from national fund plus 1.71 billion euros from REACT-EU.
The NRRP also includes several reforms necessary to achieve Plan’s objectives on time:
On 13 July, ECOFIN officially approved Italy’s National Recovery and Resilience Plan. The Plan already received the approval of European Commission, which assessed it with ten A and one B on “Costs” item, as the other Member States’ plans already approved.
According to the European Commission, the Italian Plan foresees 37% of measures aimed at green transition and 25% at digital transition, quotas slightly reduced compared to Italian government’s provisions, but in line with parameters defined by the Commission.
Italy’s request for 13% pre-financing, 24.9 billion euros in total – 9 billion euros in grants and 15.9 billion euros in loans – was accepted, and first resources were disbursed in August.
The Italian plan foresees to spend around 13.8 billion euros for 105 projects by 2021. However, in order to obtain next tranches of EU resources, Italy will have to achieve many objectives regarding investments and reforms’ implementation: as defined in European Commission’s proposal on approval of NRRP, Italy will have to achieve 51 intermediate targets to obtain around 24 billion at the beginning of 2022, and other 45 milestones by June 2022.
To this end, between May and June 2021 Italian government approved the three NRRP “pillars”, Plan’s governance, simplification of procedures and Public Administration recruitment. Moreover, by June 2021 the Government will present the reform of the justice system and public contracts and concessions, while in July the annual law on competition should be defined.