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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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ITALIAN ELECTIONS

Italy’s hard right set for election victory after left-wing alliance collapses

An Italian centre-left election pact broke down on Sunday just days after it was formed, leaving the path to power clear for the hard- right coalition.

Italy’s hard right set for election victory after left-wing alliance collapses

The alliance between Italian centre-left parties was left in disarray on Sunday night, potentially meaning a landslide victory for the hard-right coalition at early general elections in September.

The leader of the centrist Azione party withdrew support for the left-wing coalition led by the Democratic Party (PD) just five days after the two joined forces, saying it could not work with left-wingers brought in to boost the alliance.

Carlo Calenda, leader of Azione, withdrew his support on Sunday after PD made another pact with smaller left-wing parties including the radical Sinistra Italiana, and new green party Europa Verde.

“You cannot explain (to voters) that to defend the constitution you make a pact with people you know you will never govern with,” Calenda told newspaper Corriere della Sera.

The news was greeted with jubilation by hard-right League leader Matteo Salvini, who tweeted: “On the left chaos and everyone against everyone!”

Giorgia Meloni, leader of the neofascist Brothers of Italy party (FdI) mocked a “new twist in the soap opera of the centre-left.”

READ ALSO: Italy to choose ‘Europe or nationalism’ at election, says PD leader

Analyists predict the centre-left split could hand the right-wing bloc a landslide victory at the election on September 25th, with Meloni tipped to become Italy’s first female prime minister.

Italy’s political system favours coalitions, and while Meloni has a strong alliance with Salvini’s League and Silvio Berlusconi’s Forza Italia, Letta is struggling to bring together the disparate  progressive parties.

The PD is neck and neck with Brothers of Italy in the latest opinion polls, but even in partnership with Azione, the group most recently polled at 33.6 percent, compared with 46.4 percent for the right.

Early elections were called after Mario Draghi’s government collapsed in late July. Draghi’s government currently remains in place in a caretaker role.

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