The highest amount of NextGenerationEU funds arrives in Rome! How does Italy plan to use its trophy?

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Within the European Union (“EU”) Member States, Italy is by far the biggest beneficiary of NextGenerationEU (“NGEU”), Which, with its 750 billion euros in funds, constitutes the largest stimulus package ever funded by the EU.

The NGEU program, adopted with the aim of reviving the bloc’s economy following the pandemic crisis, revolves around the Recovery and Resilience Facility (“FRR“), which from 2021 to 2026 will deploy a total size of 750 billion euros – of which 390 billion euros in the form of grants, and the remaining 360 billion euros in the form of low-interest loans.

Under the RRF, Italy is expected to receive a total of 191.5 billion euros over the next 5 years (68.9 billion euros in grants and 122.6 billion euros in loans).

In order to achieve the general objectives set by the Italian national recovery and resilience plan (“NRRP“), an additional amount of EUR 30.6 billion will be financed (through dedicated national resources) through an additional fund established by Italian Legislative Decree No. 59 of 6 May 2021, on the basis of the multi-year budget gap approved by the Italian Council of Ministers on April 15, 2021.

An additional 26 billion euros have been earmarked for the implementation of specific works and the replenishment of the resources of the Development and Cohesion Fund by 2032, and a final 13 billion euros from ReactEU will be spent over the years. years 2021-2023. The total amount of funds envisaged thus amounts to 261 billion euros.

The NRRP, which foresees huge investments and a coherent reform package, was submitted by the Italian government to the European Commission on April 30 and subsequently approved by the Council of the EU on July 13.

Outline of the ITALIAN Recovery and Resilience Plan

The NRRP is based on three strategic objectives which are in line with the main challenges agreed within the framework of the NGEU: ecological transition, digitization and innovation and social inclusion. The underlying objective of the NRRP is to help address the structural weaknesses of the Italian economy by reforming and digitizing both the public administration and the judiciary, improving the business environment and supporting digitization. businesses, protecting the climate with large-scale energy. efficiency renovations and sustainable mobility, and, last but not least, improving education and training across the country.

The three key areas around which the NRRP is designed expand further into the following six main missions.

  1. Digitization, Innovation, Competitiveness, Culture‘(40.32 million euros), structured around three key areas:
    • Digitization, innovation and security of the public administration sector;
    • Digitization, innovation and competitiveness of the productive sector;
    • Tourism and Culture 4.0.

    The main actions within the framework of this first mission include: achieving the goal of 100% of people connected by 2026, ensuring fast Internet connections to 8.5 million families and businesses, deploying optical fiber in 9 000 additional schools, allow connectivity in 12 000 national health services. points, committing to a digital approach to relaunch tourism and culture.

  2. Green revolution and ecological transition‘(59.47 billion euros), further articulated through the following key actions:
    • Circular economy and sustainable agriculture;
    • Renewable energies, hydrogen, network and sustainable mobility;
    • Energy efficiency and requalification of buildings; and
    • Protection of land and water resources.
  3. Infrastructures for sustainable mobility‘(25.40 billion euros), through investments in the rail network and intermodality and integrated logistics.
  4. Education and research‘(30.88 billion euros), focused on improving the supply of educational services from nurseries to universities, but also research to businesses.
  5. Inclusion and cohesion‘(19.81 billion euros), both pursued by targeted labor policies and special interventions for territorial cohesion.
  6. Health‘(15.63 billion euros): the sixth and last mission of the NRRP which aims to develop local networks, equipment and telemedicine for territorial health assistance and to promote innovation, research and digitization of the National Health Service.

Practical aspects

The NRRP will be implemented through a series of legislative acts, according to a specific timetable published on the website of the Italian Parliament.

The current estimate of the distribution of NRRP resources provides for the following distribution of the total allocation of the Plan:

  • 32.6% in favor of investments in construction and civil engineering works;
  • 18.7% in favor of incentives and tax credits for companies; and
  • 2.4% will be used to reduce employer contributions in favor of companies.

The approval of the NRRP by the European Commission and the Council of the EU does not constitute control from a state aid perspective. Compliance with the State aid provisions is still required by recital 8 of Regulation 241/21 establishing the recovery and resilience mechanism. The state aid regime is thus considered to be complementary to the RRF and the national plans resulting from it.

In line with this view, the NRRP makes explicit reference to the importance of ensuring compliance with EU state aid rules, in particular when it illustrates such instruments (like “development contracts – contratti di sviluppo”) financial support for investments to be granted to SMEs in order to improve the productivity of their supply chains.

NRRP funds are open to all companies, subject only to any specific requirements related to the sectors to which the fund is linked.

Decisions on the specific modalities and procedures for accessing NRRP funds will be made by the competent authorities for each mission envisaged in the Plan. There are no general guidelines available at this time.

The main sectoral interventions envisaged in the NRRP generally aim to reduce the territorial, generational and gender gaps. The plan provides for significant investments for young people and women, as well as an allocation of 82 billion euros specifically to the regions of southern Italy. Thus, for the companies which will participate in various capacities in the projects financed by the PNRR, this will result in the inclusion of provisions which will condition the execution of the projects to the hiring of young people and women, including through contracts. training or specialization. In calls for tenders, companies will be required to comply with specific criteria geared towards equality objectives (eg: reserving certain quotas for women and / or young people within the company). Compliance with these criteria will also be considered as a valuing element of the offer submitted.

The official portal of the Italian National Recovery and Resilience Plan can be accessed here.


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