How Italy plans to spend €209 billion of EU money

How Italy plans to spend €209 billion of EU money
A wide angle view shows the Italian Air Force acrobatic unit Frecce Tricolori (Tricolored Arrows) performing over the new San Giorgio bridge on its inauguration day on August 3, 2020 in Genoa. AFP
Italy's prime minister on Wednesday set out plans for spending the country's 28 percent share of the €750 billion EU recovery fund aimed at helping countries re-emerge from the coronavirus crisis.

READ ALSO: How the EU agreed its €750 billion rescue plan to save shattered economies

Italy, which pushed hard for more EU support at the height of the crisis, is set to receive the largest share: 209 billion euros, or 28 percent of the entire rescue fund.

The deal was struck back in July after hard-hit Italy and Spain fought for grants, rather than loans – against stiff opposition from the Netherlands and some other northern EU states.
 
Italian Prime Minister Giuseppe Conte described the funding as “an opportunity to build a better Italy” and said he didn't want to “waste a single euro”.
 
As well as using the English phrase “Recovery Fund”, in Italian it is also referred to as the Piano nazionale di resilienza e rilancio, or National Resilience and Relaunch Plan (PNRR).
 
Photo: AFP
 
The money will not start to arrive until the first quarter of 2021, and each country has to detail how it will be spent before the allocated amounts are released.
 
The Italian government on Wednesday sent its Recovery Plan guidelines to parliament for approval.
 
Once approved, Italy will then need to send its draft proposal to Brussels by October 15th, while the deadline to present the final plan is January 2021.
 
 
 
The 38-page document contains plans to lower taxes for the middle class, and to double Italy's economic growth rate.  While we can't detail all of the proposals, here's an overview of what it contains.
 
Six priorities
 
It's hoped the funding could be used to tackle some of the long-standing issues widely seen as holding back Italy, and its economy. Overall the government plan is divided into six areas:
  • Digitalization, innovation and growth
  • Green policies aimed at decarbonisation
  • Transport infrastructure
  • Education, training, research and culture
  • Social cohesion and gender equality
  • Health

Some of the main targets set out in the document include:

  • Doubling the country's economic growth rate, bringing it up from a pre-crisis average of +0.8% over the last decade to 1.6% in line with the European average.
  • Increasing in the employment rate by 10 percentage points, from the current 63%  to 73.2%, closer to the avergae in other EU member states.
  • Increasing research and development expenditure to 2.1% compared to the current 1.3%.

Photo: AFP

Where is the money going?

Nearly 35 billion is destined for hospitals, while schools will receive funding for 368,000 new classrooms and updated equipment, as well as computer voucher to be made available to all families with school-age children. Funds have also been allocated for scholarships.

it is expected that the roll-out of 5G will be financed by the recovery fund in at least 100 cities.

Transport

Just over one billion euros is allocated to the controversial Turin-Lyon (Tav) high-speed railway line, and 4.5 billion for Sicily's planned Palermo-Messina-Catania railway. The plan sets aside 2.6 billion for a direct high-speed link between Naples and Bari in the south.
 
Discounted or free tickets will be made available for public transport within cities.
 
READ ALSO: 
The motorway network must also be adapted to the increased use of electric vehicles with the installation of charging points.
 
More jobs in public administration will be created, and the plan also includes incentives for businesses to allow flexible working and working from home.

Tax reform

The government sas it wants to completely overhaul Italy's tax system, creating “a tax system favorable to growth” by cutting taxes for the middle classes, particularly for families.

The document details plans for “a comprehensive reform of direct and indirect taxation, aimed at designing a simple and transparent fair tax for citizens, which in particular reduces the tax burden on the middle classes and families with children and accelerates the transition of the economic system towards greater environmental sustainability “

 


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