Cohesion policy back in the hands of the government but not necessarily working

With the decree of 30 April 2024 approved by the Council of Ministers, the last act in the re-centralisation of cohesion policy, definitively drawn into the Pnrr approach, was accomplished. Cohesion and Pnrr have two different governance systems: a bottom-up (place-based) approach with local and regional leadership in cohesion and a top-down centralist approach for Pnrr. The cohesion policy reform process in Italy had started with the approval of the Pnrr decree (Dl 13/2023) that abolished the Territorial Cohesion Agency. This was followed by the Decreto Sud (Decree 124/2023), which reformed the Development and Cohesion Fund and Special Economic Zones. With the reform of the Development and Cohesion Fund (Fsc), the instrument of the Cohesion Agreement was introduced. The agreements, signed in each region by the Prime Minister and the President of the Region, are the indispensable tool to unlock the allocation of Fsc resources to regional administrations. While previously the use of these resources took place within a greater space of planning and management autonomy on the part of local and regional governments, in the current model there is a considerable strengthening and centralisation of the coordination and implementation control function.

Equally paradigmatic is the reform of the Special Economic Zones (SEZs). The eight SEZs, active since 2021, were concentrated in the southern regions and linked to port infrastructure, with a role in encouraging local investment and attracting foreign capital. Following the reform, they were grouped into a Single Zone, which covers the entire territory of southern Italy. From the coordination of an extraordinary Commissioner for each SEZ, there has been a shift to a central 'Cabina di Regia' and the creation of a Mission Structure with direction, coordination, and monitoring responsibilities, headed by the Minister for European Affairs, Cohesion Policies
and the NRP, which will operate according to the three-year Strategic Plan in coherence with national industrial policy and the NRP.

The last act is contained in the decree of 30 April, which reforms cohesion policy. Also in this case, a steering committee is introduced in order to 1. ensure the coordination between the interventions financed by the state and those of the regions; 2. ensure the coherence of the interventions financed by cohesion and the NRP; 3. identify the priorities of the Step platform to be supported with the help of cohesion policy. Point 3 deserves attention. The Step - Strategic Technologies for Europe Platform - is a European instrument created to attract investment funds for critical emerging technologies in the digital, clean technologies and biotechnology sectors. The Decree stipulates that part of the funds to invest in the Step platform can come from a reprogramming of cohesion policy resources, i.e. by diverting part of the cohesion funds to finance strategic industrial policy.

The common thread linking the sequence of acts is the increased coordination between interventions financed by the cohesion policy, those of the NRP
and industrial policy; the outcome is a re-centralisation of the governance of cohesion, towards the NRP model.

Will it work? Re-centralisation in itself is no guarantee of greater efficiency and effectiveness. First of all, there is a problem of conflicting objectives: reduction of territorial disparities and social cohesion for cohesion; improved competitiveness and autonomy in strategic sectors for NRP and industrial policy. How these different objectives will be reconciled is not yet clear. A second issue is the risk of administrative bulimia in the ministries that will have to conduct and coordinate the various policies, which must be properly managed. Finally, it is crucial that a view inspired by the principle of loyal cooperation prevails in which state and regions collaborate effectively, because the role of local and regional governments remains crucial in the implementation of policy interventions.

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