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NRRP: objectives and structure

“Our ‘Italia Domani’ [‘Italy Tomorrow’] Plan fully meets the priorities defined by the Commission, providing a decisive boost to Italy’s digital transformation and environmental transition. The Plan will also contribute to reducing disparities between different areas within our country and to strengthening social cohesion. It firmly supports women and young people, as our country’s recovery depends on them” - President of the Council of Ministers Mario Draghi at the press conference held on 22 April together with President Ursula von der Leyen, following the European Commission’s approval of the National Recovery and Resilience Plan (NRRP).

This Plan is part of the NextGenerationEU (NGEU) programme, the EUR 750 billion package agreed by the European Union in response to the pandemic crisis. Italy’s Plan includes investments worth EUR 191.5 billion, financed through the Recovery and Resilience Facility.

In addition to these resources, EUR 30.6 billion are available from the ‘Complementary Fund’, financed through a multi-annual budget slippage which was approved by the Council of Ministers on 15 April to cover a national investment plan for projects in line with the NRRP‘s strategies.

The Plan is made up of six Missions and has three main objectives. The first is short term in nature and refers to repairing the economic and social damage caused by the pandemic crisis. Secondly, from a more medium/long-term point of view, the Plan tackles a number of weaknesses that have been weighing down on Italy’s economy and society for decades: the long-standing divides between the country’s geographical areas, gender inequality, weak productivity growth and a low rate of investment in human and physical capital. Lastly, the Plan’s resources will go towards driving a comprehensive ecological transition. 

The NRRP therefore goes beyond being a traditional investment programme; it is designed to be a real transformative project, with resource allocations being accompanied by a significant package of reforms. These reforms are necessary to overcome the historical barriers that have held back public and private investments over recent decades, together with the structural weaknesses which, for a long time now, have been slowing down economic growth and causing unsatisfactory levels of employment, especially among young people and women.

The NRRP will help support economic recovery, boosting the GDP growth rebound and contributing to keeping income levels high in the years to come. The NRRP will also increase growth potential and productivity through innovation, digitalisation and investments in human capital.

Thanks to the NRRP, Italy’s GDP in 2026 will be 3.6 percentage points higher than the baseline scenario. Over the last three years of the time frame in question (2024-2026), employment will be 3.2 percentage points higher.

These forecasts assume that public investments will be made in a highly efficient way, but do not quantify the further stimulus that may well derive from the Plan’s reforms and, with regard to female and youth employment, they do not take into account the conditionality clause that features throughout the Plan. Growth may therefore exceed the estimates stated in the Plan, thanks to the implementation of efficient reforms aimed at improving our economy’s competitiveness. 
 

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Published on: 30 November 2021
Updated on: 30 November 2021