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ECONOMY

EXPLAINED: What’s changing under Italy’s post-pandemic recovery plan?

Italy’s recovery plan is often in the news, but do you know exactly what it involves? With funding for everything from better healthcare to faster wifi, here's what's set to improve about life in the country.

Nero's palace in Rome, Italy
As part of planned urban redevelopment measures, many of Rome's historical sites will undergo renovation works. Photo by Alberto PIZZOLI / AFP

Italy is ready to move on to the next phase of its National Recovery and Resilience Plan (Piano Nazionale di Ripresa e Resilienza, or PNRR), after the government said at the end of June it had met all of its targets for the first half of 2022.

The country is now due to receive its second yearly instalment of funding from the European Commission, amounting to a further 24.1 billion euros. The first payment of 24.9 billion came last August.

But why is Italy receiving this money – and what exactly is the government doing (or planning to do) with it?

Italy is the biggest beneficiary of 750-billion-euro post-pandemic recovery aid package known as the Next Generation EU programme (NGEU), which is being split between member states.

The country is set to receive a total of 191.5 billion euros from the fund by the end of 2026.

In order to access the funding, Italy’s government had to set out in the PNRR exactly how it would spend it – on projects that would not only help the national economy recover, but would leave it more resilient in future.

READ ALSO: What does Italy’s latest political crisis mean for the economy?

Prime Minister Mario Draghi, tasked with putting the plan together, said it would help the country recover after being hit particularly hard by the pandemic but that it also “addresses some weaknesses that have plagued our economy and our society for decades”.

The PNRR include plans to upgrade railways, rebuild crumbling roads and bridges, and speed up wifi connections, with the government saying it aims to use the money to improve infrastructure and make Italy a “country for young people”.

The government outlined the ins and outs of all the investments and reforms in the PNRR (with the official document available here), dividing them into six main areas, or ‘missions’.

Italy's Recovery Plan; 2022, first semester objectives

2022’s first semester PNRR objectives divided by category. Photo courtesy of Italia Domani, Piano Nazionale di Ripresa e Resilienza.

The gradual completion of the plan is expected to bring about a yearly 0.5-percent GDP increase.

Here’s a closer look at some the most relevant investments and reforms included in the plan.

Digitalisation, innovation, competitiveness, culture and tourism

Over 40 billion euros will be poured into the ‘digitalisation and innovation’ measures. 

Simplifying and streamlining public administration procedures will be one of the government’s top priorities as the planned measures will try to reduce the time of civil and criminal trials by 40 and 25 percent respectively.  

Other interventions will revolve around the installation of 5G nationwide and the construction of high-speed internet networks covering government agencies, schools, health facilities and museums all across the country.

Also, ultra-fast broadband is expected to serve an additional 8.5 million families by 2026.

OPINION: Italy has a big chance to improve internet speeds – but will it take it?

A number of measures are aimed at enhancing Italy’s immense cultural heritage by improving access to historical sites located in rural or remote areas (as part of a Piano Nazionale Borghi, or National Plan for Villages), and by digitalising services connected with the tourism industry. 

As part of the tourism redevelopment project, Rome will receive around 500 million euros which will be used to enhance 283 of its historical sites.

Milan's Centrale railway station

Construction of high-speed rail on the Naples-Bari line is expected to reduce the journey time by as much as 90 minutes. Photo by Piero CRUCIATTI / AFP

Green revolution and ecological transition

Funds adding up to a total of 59.5 billion euros (equal to 31 percent of the Recovery Plan’s total value) will be injected into the ‘green revolution’ mission. 

Much of the ecological transition plan will revolve around the development of renewable energy solutions, including agrovoltaic plants and hydrogen charging stations for road vehicles. 

There are also plans to modernise current waste management facilities and build new ones to achieve a “circular economy” (a model of consumption based on the ‘use, recycle and reuse’ principle).

Finally, electricity grids will be upgraded all over the country and water leakages are expected to decrease by as much as 15 percent by 2026 due to system improvements.

Infrastructure for sustainable mobility 

Over 13 percent (25.4 billion euros) of the funds will be set aside for the improvement of Italy’s transport network.

The major measures will involve the construction of high-speed rail on the following lines in southern Italy: Salerno-Reggio Calabria, Naples-Bari and Palermo-Catania, with journey times dropping by as much as 90 minutes.  

Regional and local railway lines and stations will also be upgraded to make public transport more accessible to all.

The planned improvements also include the renovation of many bridges, tunnels and viaducts across the country amid longstanding concerns about safety and stability.

Italian classroom, Venice

As many as 40,000 Italian schools will be equipped with high-speed internet connection in a bid to offer pupils the latest learning methods. Photo by Vincenzo PINTO / AFP

Education and research

The Italian education system will undergo major changes as part of a dedicated 31-billion-euro package. 

The available funds will be used to renovate 2.4 million square metres of school buildings and create 228,000 new places in nurseries. 

Also, as many as 40,000 institutes will be equipped with high-speed internet connection to allow for the implementation of innovative learning methods.

In closing, student accommodation will go from the current 40,000 available lodgings to 100,000 by the end of 2026.

Cohesion and inclusion

The ‘cohesion and inclusion’ mission, which has been allocated a total of 19.9 billion euros, seeks to build a brighter future for the next generations by innovating the labour market, erasing social and economic inequalities and supporting female entrepreneurship.

A number of nationwide programmes, including the new Worker Employability Guarantee, will aim to increase the national employment rate and provide key assistance for unemployed individuals. 

Other than that, a Women’s Entrepreneurship Fund will be set up to support female-run businesses and increase gender equality in the labour market.

Finally, the plan states that the government will work to reduce marginalisation by redeveloping public areas, promoting local cultural activities and offering support for people with disabilities.

Healthcare

The Italian healthcare system will receive PNRR funds amounting to a total of 15.6 billion euros.

The government’s priority will be to improve hospital infrastructure by modernising existing structures and building new ones – 400 community hospitals for short-term medical care and 1,350 care homes will be built by 2026.

Additionally, intensive care units will be upgraded and hospitals across the country will receive state-of-the-art appliances for CAT scans, MRIs and other medical tests.

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POLITICS

Italy’s government to continue sending weapons to Ukraine in 2023

Italy's new government issued a decree on Thursday to continue sending weapons to Ukraine through 2023, continuing the previous administration's policy of support to Kyiv.

Italy's government to continue sending weapons to Ukraine in 2023

The decree extends to December 31, 2023 an existing authorisation for “the transfer of military means, materials and equipment to the government authorities of Ukraine,” according to a government statement.

Since taking office in October, Prime Minister Giorgia Meloni has repeatedly voiced her support for Kyiv while underlying the importance of the Atlantic alliance.

In her first speech to parliament, the leader of the Brothers of Italy party pledged to “continue to be a reliable partner of NATO in supporting Ukraine.”

Her predecessor Mario Draghi was a staunch supporter of Kyiv, but the issue of sending arms to Ukraine split the biggest party in parliament during his coalition government, the Five Star Movement.

That friction led to the early elections that brought Meloni to power.

Parliament now has 60 days to vote the decree into law.

READ ALSO: Outcry in Italy after Berlusconi defends Putin’s invasion of Ukraine

Despite Meloni’s efforts to reassure her Western allies of Italy’s support for the EU’s and NATO’s Ukraine strategy, including sanctions on Russia, the close ties to Russia of her two coalition partners have come under scrutiny.

Both Matteo Salvini of the League party and former premier Silvio Berlusconi, who leads Forza Italia, have long enjoyed warm relations with Russia.

In October, an audio tape of Berlusconi was leaked to the media in which the former premier described how he had received a birthday present of vodka from Russian President Vladimir Putin.

In the tape, he also expressed concerns about sending weapons and cash to Kyiv and appeared to blame the war on Ukraine’s president, Volodymyr Zelensky.

Berlusconi later issued a statement saying his personal position on Ukraine “does not deviate” from that of Italy and the EU.

Since the beginning of the war in Ukraine, Salvini, too, has come under fire for his relations with Moscow, including a report that he dined with Russia’s ambassador to Rome just days after that country’s invasion of Ukraine.

Salvini, who has criticised EU sanctions as ineffective, has long admired Putin, even wearing T-shirts emblazoned with the Russian leader’s face.

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