Gentiloni: ‘The challenge now is to secure new joint investments’

The NRRP has been a ‘stress test’ for the Republic, and on the whole we have passed it. Now begins the equally important and strategic phase of the post-PNRR era: how to capitalise on this experience to sustainably revitalise Italian growth. This, in a nutshell, is the theme of the report – remarkable for the balance and quality of its contributions – edited by Roberto Garofoli on behalf of ANCI. Garofoli and the team he coordinates are doing the country a service: any political force aspiring to govern or to tackle the challenges of government would do well to draw on the content of these 800 pages.
It all begins with Next Generation EU, an extraordinary chapter in European history that I experienced first-hand in Brussels as Commissioner for Economic and Monetary Affairs.

Reflecting on that experience, I have reached four conclusions.
Firstly, the European response in 2020 was swift and rose to the challenge. A week after the WHO declared a pandemic on 18 March, the ECB launched the Pandemic Purchase Programme and the Commission suspended the rules of the Stability Pact. These two decisions stabilised the markets and prevented the dramatic Covid crisis – as had happened with the financial crisis ten years earlier – from causing a huge divergence between European countries, based on their differing financial capacities.
Secondly, by allocating the 750 billion in Eurobonds not on an equal basis but by prioritising the countries hardest hit by Covid and most vulnerable, such as Italia, Next Generation EU has actually promoted convergence, favouring growth in southern countries over those in the centre-north.
Thirdly, Next Generation EU has introduced the so-called ‘performance-based’ method: the disbursement of funds is conditional upon the achievement of targets within defined timeframes.
Fourthly, it has changed the nature of the relationship between the Commission and individual countries.

The Commission’s role has expanded, and a method has been introduced which is also reflected in the new rules of the Stability Pact, based on medium-term plans negotiated between the Commission and the Member States.

Alongside these positive conclusions, Next Generation EU has also had inherent limitations, going well beyond the delays in this or that national plan. Two in particular.
On the one hand, the lack of resources dedicated to joint projects. Some of the objectives set out, for example, in the Draghi and Letta Reports could have benefited from a share of the joint funding. An opportunity was missed.
The second limitation emerged with the Russian invasion of Ukraine, which forced far-reaching changes to national plans – already underway – whilst they were being implemented, with negative consequences both for implementation timescales and for the delicate balance between meeting objectives and maintaining flexibility.

There have certainly been no shortage of challenges in the implementation of the Italian NRRP. These included a lack of focus in the interventions, the inclusion of projects that had been on the back burner for some time, and discrepancies between the timing of EU disbursements and actual expenditure. There were also delays, which were wrongly attributed to the local authorities, given that they mainly concerned projects involving very substantial sums of money.
On the whole, however, it must be acknowledged that the three governments involved in implementing the Plan (Conte 2, Draghi and Meloni) have stood up to the stress test and, as President Mattarella hoped in March 2023, have ‘got down to work’.
Setting aside the assessment of individual measures, and discounting ill-advised schemes such as the Superbonus, the result has been a marked acceleration in public investment spending, which from 2022 has reached and finally exceeded the European average – itself on the rise despite the crisis. And there has been an equally marked acceleration in the decision-making times of the public administration.