New Challenges for the Union: The NRP Model for Cohesion Policy

In the election campaign, the subject was not even touched upon. But the next European legislature, for which more than 370 million citizens will go to the polls from tomorrow, could mark a turning point for cohesion policy, the Union's pivotal instrument for redistributing wealth between Member States and between Member States' territories.

The discussions on the next multiannual budget post 2027 will come into full swing in a year's time, but the discussion among the European Commission's technical staff has already begun. And as far as European public investment policy is concerned, the work revolves around one question: what to do with the experience of the Recovery and Resilience Mechanism and the related national plans, the NRPs, and how to combine it with cohesion fund investments? The new commission and the new parliament will have to decide whether and how to continue the Next Generation Eu experience initiated during Covid and what balance to find with cohesion policy, which absorbs one third of the common European budget and on which the projects and policies of the NRPs have largely overlapped, with a 'displacement effect' whose consequences will have to be assessed.

What can be said, for now and for Italy, is that the 2021-2027 structural funds' expenditure is stuck at almost zero. This is the result of a mix of factors, old and new: the overlapping of instruments accompanied by the scarcity of projects, the limitations of public administrations and the reform of national cohesion wanted by minister Raffaele Fitto, to name the main ones. Those who defend cohesion and fear that the 'Pnrr method' distorts its territorial nature, look at the redistributive effects: it is a policy that leaves no one behind and makes Europe more cohesive. "In 2030, Europe's total income will be 1% higher thanks to the Cohesion Policy, it is a policy where everyone wins," European Commissioner for Cohesion, Elisa Ferreira, stressed a few days ago at the plenary session of the European Economic and Social Committee. Those who, on the other hand, want to push the so-called 'Pnrr method', praise its results orientation (resources are paid to the central state against achieved objectives and implemented reforms) against the cohesion method, which favours expenditure based on accountability (reimbursements only reach the regions and ministries in charge of programmes against invoices certifying expenditure on completed projects).

One hypothesis is that the 'Recovery and Resilience Mechanism 2.0' will focus on the Union's new priorities and the so-called European public goods, starting with common defence and energy transition, perhaps with some concessions to the territories in the design phase, from which they were excluded in the first edition. But many are also tempted by the idea of getting their hands on the structural funds, 368 billion or one third of the 21-27 budget. Perhaps under the pretext that spending - especially in some countries - is slow and inefficient. All this also has to reckon with another key element for the EU in the coming years: enlargement to the Western Balkans and beyond. It means that within a few years the Union could grow to 35 member states. The new partners will all be net beneficiaries of the European budget. Securing structural fund resources also for the new member states implies the need to find new balances, possibly without taking anything away from the 'old' ones. The Next Generation Eu model, i.e. turning to the market by issuing common debt, Eurobonds, could be part of the solution.