This document aims to analyse the main points provided for in the draft "Guidelines for the definition of the National Recovery and Resilience Plan". Said draft, which will be presented to the Government on 10 September 2020 and subsequently sent to the Parliament, outlines and defines the challenges, missions, projects and support policies that the Government intends to implement with the 209 billion of the Recovery Fund.

According to the document, in the long run the government aims to double the GDP growth rate (from 0.8% in the last decade to the European average of 1.6%) and to increase the employment rate by 10 percentage points.

1. Challenges

There are four challenges and, namely, to (a) improve Italy's resilience and recovery capability, (b) reduce the social and economic impact of the pandemic crisis, (c) support the green and digital transition and (d) increase the economy's growth potential and job creation.

2. Missions

Instead, what are called "clusters" or intervention missions are: digitization and innovation; green revolution and ecological transition; competitiveness of the productive system, mobility infrastructure; education and training; equity, social and territorial inclusion; health.

The document contains concrete proposals for each of the chosen sectors. In particular:

  1. Digitisation and innovation. Digital transition was given a primary role, providing for the digitisation of all state apparatus (public administration, education, health, tax, etc.) in order to make services more efficient and prompter. The aim is to create a digital identity for each citizen and each company. In particular, the infrastructure on which the digitisation will operate will be strengthened with the completion of the national fibre optic network and with interventions for the development of 5G networks. This will affect all areas of the Country, without neglecting areas with less market prospects or the weaker classes. There will also be interventions aimed at technological innovation and digitisation of strategic supply chains (agri-food, industrial and tourism sectors) and at strengthening the digitisation of cultural heritage, as well as interventions for an inclusive digitisation to combat the digital divide.
  2. Green revolution and ecological transition. In this regard, given the high percentage of pollution in urban centres and the degree of toxicity higher than the European average in areas where 3.3% of the population live, an extensive investment programme has been scheduled. In particular, action will be taken on the decarbonisation of new-generation transport and mobility, on the adoption of urban plans to improve air quality, on improving energy efficiency of public buildings, on the integrated management of water cycle and on monitoring the quality of inland and sea water for the purposes of counteracting pollution, on the mitigation of hydrogeological and seismic risks, on the conversion of energy production and transport to a sustainable approach, on investments in a circular economy (waste, renewable sources, etc.), on the support to the ecological transition for agriculture, industry and iron and steel industry (Taranto), and finally on the sustainable exploitation of cultural heritage.
  3. Competitiveness of the production system. This mission is envisaged in order to strengthen the competitive capacity of enterprises in the Country (second largest manufacturer in the EU), to support SMEs, which are the driving force of the Country, favouring processes of merger, capitalisation and cooperation between networks of enterprises, to incentivize sectors and supply chains with growth potential, to improve the ability to attract investments and favour reshoring processes, to support internationalisation, a driving factor of the Country's economic growth between 2014 and 2019, as well as to recognise the value of Made in Italy and of the cultural and landscape heritage as a lever for development. In particular, the areas of intervention will be Transition X, investments in research and development, emerging technologies and technology transfer, policies for the attraction of FDI and in favour of reshoring, the strengthening of the Export Pact and support for the internationalisation of strategic supply chains (agri-food, industrial and tourism sectors), the strengthening of financial instruments for greater competitiveness of enterprises on international markets and the strengthening of the digital ecosystem for the promotion of cultural industry and tourism.
  4. Mobility infrastructure. The document explicitly mentions the "completion of the TEN-T corridors" which include the Turin-Lyon link. It also details the high-speed rail line for passengers and freight and the development of motorway networks with bridges and viaducts. Finally, investments are planned in public and private sustainable urban mobility, in the creation of Smart districts aimed at an integrated intermodal logistics system.
  5. Education, training and research. The objective in education and training is to increase human capital, given that the percentage of graduates in Italy is 27.6% compared to the European average of 40%. On this point, the government intends to make massive use of the Recovery Fund, envisaging interventions aimed at digitalising learning processes and tools, adapting skills to the needs of the economy and international standards, combating school drop-out, implementing policies to increase the number of graduates, retraining, training and selection of teaching staff, and, with reference to school and university infrastructure, aimed at upgrading or rebuilding in terms of energy efficiency and earthquake resistance, fibre optic cabling in universities, strengthening e-learning infrastructure and Lab Tech and innovation ecosystems.
  6. Equity, social and territorial and inclusion. Being aware of the strong increase in inequality in Italy in the years following the global financial crisis, as well as of the increase in absolute and relative poverty, the priority is to reduce gender gaps and strong disparities still existing at a territorial level, starting from the persistent gap between North and South. In this regard, the objectives set out in the programme concern active labour and youth employment policies, in addition to the Family act, the implementation of the South 2030 Plan and the National Strategy for Internal Areas, the regeneration and requalification of urban contexts, villages and internal areas and special training for women (so-called "female empowerment").
  7. Health. The plan is focused on strengthening the structures that were found to be deficient during the epidemic, such as intensive therapies and the digitisation of the healthcare system, starting with the introduction of the electronic health record. According to the Guidelines, a specific investment will also be made in home care and assistance to overcome "the current shortcomings of the public residential care units (RSA) system".

3. The projects

As regards projects that may be submitted in accordance with the plan, the draft explicitly requires that they must be fully consistent with the strategic and macro-sectoral objectives of the plan, have a significant positive impact on potential GDP and employment growth, foresee costs and economic, environmental and social impacts, be quantifiable, motivated and reasonable, make explicit the links and consistency with reforms and support policies, indicate the timing and modalities of implementation along with intermediate and final targets, clearly identify the implementing entity and that, if complementary to existing projects, credibly strengthen them.

In particular, the plan foresees the possibility to positively evaluate all projects that mainly concern public assets (infrastructure, education and training, research and innovation, health, environment, social and territorial cohesion), which are characterized by (i) rapid feasibility/construction, especially in the first phase of the plan, (ii) monitorability in terms of intermediate and final targets, as well as of the link between said achievements and the strategic objectives of the plan, (iii) rapid positive effects on many beneficiaries, so far disregarded due to lack of funds, (iv) provision of forms of public-private partnership for implementation and financing, (v) employment pact, or reliable estimate of employment benefit, (vi) low soil consumption and efficient and sustainable use of natural resources, and (vii) contribution to the achievement of Essential Service Levels ( Article 117 of the Constitution).

4. Support policies

The document also extends to the so-called "support policies". There is an emphasis on public investment that will have to be "well above 3% of GDP" and on the "review of concessions" to improve "quality of services, costs and investments". Considerable attention is also paid to the sector of research and development (R&D), in the awareness that Italy's R&D expenditure (1.35% of GDP in 2017) is lower than the EU average (2.06% of GDP) and is even lower than Germany's (3.0% of GDP). So, the minimum objective of the programme will be to reach the EU average by the end of the programme and then to maintain or increase that level in the following years moving towards levels more similar to German ones. To this end, the main initiatives of the programme will be those related to increasing resources for R&D in the public sector and university research, funding and participation in European IPCEIs, reviewing existing incentives to enhance R&D support to enterprises, and promoting the participation of enterprises in international technology hubs.

Support policies also include the tax reform, meant as a "structural reduction of the tax wedge on labour, through a progressive IRPEF reform". The review of grants "with particular attention to those harmful to the environment" is envisaged. This will be followed by tax simplification, fight against evasion and implementation of databases. In addition to justice and public administration, the labour market reform will play an important role: the aim is to "protect vulnerable workers, ensuring fair wages". Moreover, the need to increase employment and increase tax incentives for contractual welfare is being stressed.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.