Billions for a greener Italy, but will Draghi manage to spend EU money this time around?

The United Nations Climate Conference (COP26) will be held in Glasgow in the year the European Union demonstrates its commitment to making the continent more sustainable. During the Climate Summit, Innovation Origins focused on Italy. This country receives nearly 20 percent of the money from the European Union’s Next Generation Fund, which links post-coronavirus recovery to sustainability.

Nobody can say that the Italian government led by Mario Draghi, the former director of the European Bank, is not pulling it off. In record time, his government drew up an action plan aimed at boosting the growth of the Italian economy. Italy needs to become more digital, dynamic, sustainable and inclusive. In August, the European Commission approved Draghi’s plan (as well as similar plans from other European countries).

The Italian plan is good for 191.5 billion euros out of the 800 billion euros to face the consequences of the pandemic. So the lion’s share of this amount is loaned to Italy. But the money isn’t just donated.

Italy creaks and squeaks

The Italian government added another 30.6 billion euros through an additional public fund. Over the next five years, Italy will have an additional 222.1 billion euros. The money will be spent on six different areas. The main part (about 100 billion euros) consists of investments in digitization, innovation and environmental transformation.

So the money is spent not only to achieve the goals of the climate summits in Paris (2015) or Glasgow (2021), but also to become a more modern country. The Italian education system is collapsing, the judicial structure is deteriorating, and the economy has grown only 0.2 percent per year since 2000 (pre-Covid).

Success is not guaranteed

Just because Italy finally has the financial means to do things differently does not mean that success is guaranteed. First, goals and so-called “milestones” must be completed. These are quantitative and qualitative measures, 419 of which have been adopted by the government. This step has been taken. “The government is accelerating,” he says. Luciano MonteProfessor of European Union Policy at LUISS University in Rome.

This is more problematic if at the end of the day it turns out that the funds have been allocated but not paid. This may be due to problems with the application. Monty: “That was always the problem in the past.” according to Report of the European Court of Auditors (Chapter 2 of this report) For the past year, Italy ranks second to last when it comes to securing projects with European funding. In the 2014-2020 period, Italy received only 38 percent of the promised funds. This is due to the poor quality of the administrative and bureaucratic class of government.

“Over the next five years, there will be at least four times the European money available in other years. That is why the government has rightly prioritized structural reforms,” says Monti. The professor is also a member of a government commission that checks whether the proposed plans have a positive impact on the situation of young people.

Minor Disaster Tenders

The reforms include, for example, easing procurement regulations. Italian tenders often amount to small disasters, especially for foreign investors. The paperwork and waste of time are enormous. The government has already issued decrees. Many rules and standards have been simplified and times have been shortened (application, processing, appeal, etc.).

Another important reform that is being implemented is the training of civil servants, since it is they who will primarily manage the money. For example, you should invest in the quality of officials at the local level, because projects have their impact at the local level.”

Italy will also measure the success of investments in a different way than before. Monty: The goal of the financial injection is to make a strong recovery. If not, we will burden future generations with loan repayments. It is no coincidence that this European recovery fund is called “NextGenerationEU”. “

“That is why we chose a new method. It is measured not so much by production, but by result.” When measured by output, the outcome of the service is measured, but not the way it was performed. Measuring the result is more efficient.

next generation

One such “result” is investment in the development of 7,500 fast charging stations for electric vehicles along highways and more than 13,000 in cities. The Italian plan under NextGenerationEU is full of goals, measures and other green investments. Professor Monty is positive. “Environmental transformation suits Italy well. It gives a boost to the circular economy and creates job opportunities for young people.”

The UK and Italy have committed to putting climate change and reversing biodiversity loss at the center of the multilateral agenda in 2021, including through the presidencies of the Group of Seven (July), the G20 (this weekend) and COP 26 (which begins on Sunday). ). A pre-COP26 meeting was held in Milan in early October.

Read more about Italy’s green plans.