Italy’s NRRP: PM Draghi responds to the points raised by the Chamber of Deputies
Tuesday, 27 April 2021
[The following video is available in Italian only]
Good morning everyone.
First of all, I would like to thank you for the points raised during yesterday’s debate and I shall now endeavour to reply to all of your comments, point by point.
I would once again like to stress the deep respect that the Government and I have for Parliament. The schedule is, of course, very tight. The deadline of 30 April was not given for media purposes, as has been claimed; the issue is that, the earlier we get it done, the quicker we get access to the funds. The European Commission will be going to market to raise the funds for this facility around May/June, after which the process will be temporarily suspended over the summer; this means that, if we submit our Plan earlier, we will have access to the first share of those funds, which would not be the case if the Plan were to be submitted at a later date.
I therefore apologise for this debate’s tight time frames. Having said that, we have taken into consideration the many points of view expressed by Parliament, in the opinions shared both before and during the talks held between Parliament and the social partners, as well as with the very high number of counterparties who have met with Parliament for this purpose.
Another observation regards implementation of the Plan. The relative discussions do not end here: this is only the beginning of Parliament’s contribution. In fact, all the reforms contained in the Plan will be adopted though provisions and legislative instruments (draft laws, enabling laws and decree laws), with Parliament of course playing a decisive role in debating them and deciding on the relative content as part of the implementation process. Now, and even more so in the coming months, it is essential that Italy’s legislative and executive powers work together.
Many of you requested clarifications regarding the Plan’s implementation and, in particular, the role of local and autonomous authorities. As soon as this Plan is delivered, the real challenge will be to find a way of implementing it that ensures that local, regional and central government have the right governance framework in place, bearing in mind that these authorities will be called upon to complete a vast number of measures, especially in terms of exceptional public investments. This is about real governance: it is not about what Palazzo Chigi does, what goes on in Palazzo Chigi or what committees are formed. This is the key point of the Plan. The process is relatively clear regarding implementation within the various ministries; however, things become much more complex when it comes to coordinating the role of government on the one hand and that of local authorities on the other, with the latter being the main implementation bodies for the Plan.
Local authorities must play a central role in the Plan, as they are fully aware of what their local areas need, especially with regard to social cohesion and healthcare for example, as is also provided for by our Constitution. Central government is not against local authorities; precisely the opposite is true. This has been our message since this Government came into office and it is confirmed in this Plan. Moreover, the Government has also provided for the possibility to create working groups, teams, that can strengthen and help actions taken by local authorities whenever this may be necessary and welcome.
In any case, the Plan’s governance will be defined by a dedicated regulation, which will be adopted soon.
A few observations were made regarding the few resources for young people, female workers, the south of Italy and digital infrastructure. Generally speaking, this Plan is allowing us to make investments that would have been impossible and unthinkable up until a few days ago. The whole Plan invests in the future and in the new generations. Firstly, as I said yesterday, we need to guarantee an adequate welfare system, homes and job security for young Italians. In this very hall, I spoke about the measures included in the Plan for young families, social infrastructure, social housing and tax incentives on mortgages.
The Plan also introduces measures to ensure that everyone has an equal and adequate right to study, earmarking almost EUR 1 billion for student accommodation and EUR 0.5 billion for university study grants. It also provides for more PhD courses, with cumulative funding amounting to approximately EUR 1 billion.
I would also like to reaffirm that a prerequisite regarding youth and female employment will be introduced, which must be fulfilled for the to implementation of projects financed not only by the NRRP, but also by REACT-EU and the complementary plan. This is what I meant yesterday when I talked about the conditionality clause that features throughout the Plan.
The Plan includes important support measures for female workers. Actions are planned to support female entrepreneurship and, above all, a significant package will help lighten the family burden that often falls on women’s shoulders. Many measures refer to nurseries, with resources earmarked for nursery schools and pre-schools amounting to a total of EUR 4.6 billion. This investment will lead to approximately 230,000 new places being created for the youngest children, and I believe this to be a prudent estimate. The Government’s ambition is to reach and surpass EU objectives in this regard. Then again, we have such a large backlog that we need to set ourselves ambitious targets if we wish to recover some of what has been lost in the past. Community support services and home care will also be strengthened.
Lots of measures are also planned for the south of Italy. The Plan clearly explains how the resources provided by the EU facility and additional funds will be spent. As I said yesterday, around 40% of total resources will be spent in Italy’s southern regions, where 34% of the national population live. These resources will be distributed based on a geographical criterion and amount to EUR 82 billion, which is also higher than the respective share of the country’s GDP.
Some of the Plan’s Missions dedicate an even greater share of investments to the Mezzogiorno: take Mission 3 – Infrastructure for Sustainable Mobility -, for example, which earmarks 53% for the South, or Mission 4 – Education and Research – where the total reaches 46%. Please also note that over 45% of investments in ultra-wideband connectivity will be developed in the country’s southern regions.
In response to the other comments regarding the south of Italy, I would like to reiterate that the measures being taken in this area focus on four priorities: improving services, sustainability, connectivity and attracting new investments. All of these measures form part of our overall vision: to relaunch and then accelerate the Mezzogiorno’s convergence with the rest of Italy, as this process has now been at a standstill for half a century.
With regard to the comment about minimum performance levels, it is very important for the Government that these are defined and this definition is, in fact, contained in the Plan. Examples of this are the workers’ guarantee and employability programme, in the reform regarding active labour market policies, and the reform relating to the non-self-sufficient, as these are based precisely on the definition of minimum performance levels. The Government is also focusing on the issue of nursery schools, so as to increase the number of early childhood education and care services available in areas that are furthest away from the EU objective of 33% of children being able to access such services.
Moving onto broadband, the Government intends to invest EUR 6.31 billion in ultra-fast networks, broadband and 5G. The aim is to ensure that ultra-broadband networks are everywhere by 2026, regardless of an area’s geographic location or economic situation. In May, so in a few days’ time, we will begin to map private sector investment plans in order to identify the areas within Italy that would remain at a disadvantage without Government intervention. A State contribution will be provided in those areas, ensuring that no new digital gaps are created between now and 2026. We want duplicate investments to be avoided, we want market operators to choose the most suitable technology for each area and, in any case, we want citizens’ choices and competition within this sector to be protected. Indeed, in this sector in particular, greater competition has resulted in lower prices for consumers and better quality, and this is something that has been seen over the last 20-30 years. I am not claiming that competition is a panacea for all situations, absolutely not. In the majority of cases, we must think about regulated competition, not competition without rules. We have unfortunately had to learn this the hard way over recent years. Thanks to this new and complete infrastructure, we intend to invest in modernising our administration, connecting all schools and hospitals and encouraging companies to invest and digitalise.
We then heard some comments regarding tourism. I would like to underline that approximately EUR 8 billion have been earmarked for these sectors (essentially, culture and tourism). Measures are planned to enhance historical and cultural sites, with the aim of improving their safety, accessibility and attractiveness. There will also be investments in digital developments, allowing the entire tourism ecosystem to become connected and improving the competitiveness of companies operating in this industry.
Another point raised referred to Rome, and the NRRP also includes a specific initiative in this regard entitled ‘Caput Mundi’, which will be investing EUR 500 million in projects to enhance the historical and cultural heritage of our capital city. These investment projects will focus on the safety of public places and historical buildings as well as digitalising cultural services and revamping parks and historical (and I hope also more recent) gardens. We also intend to launch a project which, starting from the capital, will encourage tourists to visit routes around Italy that are perhaps less well-known but are by no means less unique.
The issue of ‘Made in Italy’ industries was also touched upon. One of the main objectives of Mission 1 is to encourage internationalisation and to help companies scale up, especially in the most innovative and strategic sectors. The investments forming part of the internationalisation fund, which is worth approximately EUR 1.2 billion, move in this direction, as do those that are specific to high-tech sectors such as the aerospace industry. In general, investments in research and development will contribute to ‘Made in Italy’ industries becoming increasingly characterised by their innovation capacity..
Many of you asked for guarantees regarding the ‘Superbonus’ tax incentive. I shall repeat what I said yesterday: over EUR 18 billion will be dedicated to this thanks to the resources made available by the NRRP and the relative complementary fund, which is the same amount that was earmarked for this in the past. This tax incentive will receive financing until the end of 2022, and will be extended to June 2023 for social housing (‘IACP’). With regard to the future, in its 2022 budget bill, the Government shall undertake to extend the ‘Ecobonus’ tax incentive until 2023, taking into account the data relating to its application in 2021. I also completely agree with the point that the Ecobonus is not very attractive because the relative procedures are too complex. This is why we will be intervening with a decree law which will be submitted by the end of May, introducing important simplifications to ensure that people can make use of this tax incentive.
A number of points were also raised about agriculture, in relation to which there are several digitalisation projects planned: we are earmarking EUR 500 million for innovation and mechanisation in the agriculture and food industry. This initiative supports the modernisation of agricultural machinery, in turn allowing for more precise farming techniques to be introduced alongside the use of farming technology 4.0, as well as the modernisation of vehicle fleets in order to reduce emissions.
Hydrogen was also commented on a number of times. First of all, I would like to underline that the NRRP earmarks a total of EUR 3.6 billion for the development of hydrogen projects, which is significantly higher than the EUR 2 billion being spent in France or the EUR 1.6 billion being invested in Spain.
The ecological transition will clearly tend towards the use of ‘green’ hydrogen. We must bear in mind that this will require unprecedented efficiency in achieving goals to generate electricity from renewable sources; should these not be met, we will have to consider alternative techniques to generate hydrogen as a vector. The target is for 72% of global electricity to be generated by renewable sources in 2030. This means installing approximately 70 gigawatts of renewable power over the next ten years. The current rate of installation of such power stands at only 0.8 gigawatts. It therefore all depends on the extent to which we will be able to respect the Plan’s timetable, minimising any delays in implementing energy infrastructure. We either implement these reforms or the energy transition will require, if you do the maths, more than 30-40 years.
With regard to another point raised yesterday about charging stations for electric vehicles, the Plan sets a number of clear and ambitious targets. The aim is to develop 7,500 charging stations along our express roads and around 13,700 charging stations in town centres.
More generally speaking, I noted a number of conflicting comments regarding the environmental transition. Some fear that this may damage our existing industrial system, while others are demanding that this transition be part of all measures taken. I believe this to be a relatively simple contradiction to solve.
The Government is convinced that the ecological transition must involve all production sectors and this is a priority that runs throughout the Plan. The NRRP allocates around 40% of the available resources to climate objectives. In addition to the measures planned under Mission 2, there are also those relating to transport and energy efficiency. We are therefore well above the EU target of 37%.
At the same time, we are also convinced that the environmental transition represents a driver for development and employment, especially for young people. Up until now, however, it has rather been viewed as a setback to investments and “progress”. It is crucial to understand that, if it is done right, this transition will not hinder progress: it generates employment, it generates innovation and it generates production. Take the automotive industry, for example, and the changes this is undergoing as a result of electric mobility. For this, there are significant and specific investments in batteries.
With regard to the issue of the Environmental Impact Assessment commission, on average it takes over two years for proceedings to be completed. These time frames are not compatible with the infrastructure we need and that, I would like to remind you, we are implementing also in order to reach our environmental objectives. The reforms we are proposing will reduce these time frames, together with the strengthening the capacity of the newly established Ministry of Ecological Transition.
A point was also raised about land consumption, which is a particularly significant issue in the Plan and the Government is committed to submitting a law on this. As an example of the attention being paid to this issue, I would like to make reference to the ‘Parco AgriSolare’ project, as the relative investment does not involve any land consumption.
I shall now move on to the issue of high-speed railway lines. Under the Plan and the relative complementary fund, over EUR 15 billion will be invested in this. An example is the high-speed line between Salerno and Reggio Calabria. This will be a truly high-speed service, with trains travelling at 300 km per hour. These investments will mean that it will take the same amount of time to travel from Rome to Reggio Calabria as it will from Rome to Turin. All high-speed lines refer to new and extremely innovative projects. The Rome-Pescara line is a brand new project. Doubling the track along the existing Palermo-Catania-Messina line will meet the requirements put forward by the Sicily Region.
EUR 8.6 billion will go towards railway improvements in the north of Italy. These investments will strengthen rail services and provide efficient connections with existing port systems with regard to goods haulage. In particular, thanks to the work on the Liguria-Alps line, it will take half the time to travel between Genoa and Milan and between Genoa and Turin. Capacity will also be increased, from ten trains per hour to 24.
A number of questions were raised regarding social housing. A EUR 500 million investment in social housing is included in the innovative programme to increase quality of living. Through this project, we are investing EUR 2.8 billion to build new public housing and reduce housing problems, with particular reference to existing State-owned assets and the redevelopment of degraded areas; at the same time, we are focusing on green innovation and sustainability.
Specific measures have also been planned regarding earthquake-affected areas. EUR 1.78 billion will go towards these areas, made available by the complementary fund. The NRRP includes several initiatives to upgrade public buildings, which also involve earthquake protection.
An observation was also made about the funds earmarked for research. More resources are now being made available for research compared with the previous version of the Plan. This, however, is not enough: in addition to the NRRP, basic research must receive additional support from ordinary policies, and must be assessed in order to check the efficiency of the investments made.
Many of you asked about taxation. The tax reform is part of the set of reforms that must be completed alongside implementation of the Plan, despite not being included in the Plan’s scope of action. The tax reform is one of the key actions required to solve Italy’s structural weaknesses and, in this regard, it forms an integral part of the recovery that we intend to trigger thanks to the resources made available by the EU.
The tax reform requires broad political consensus. The Government has undertaken to submit an enabling law by 31 July 2021. So, again, you can expect this soon. Parliament will be fully involved and will play, and indeed has already played, a leading role through the ‘preliminary analysis of the IRPEF [personal income tax] reform and other aspects of the tax system’, launched by the parliamentary commissions and still ongoing. The recommendations arising from the commissions’ work will be reflected in the draft enabling law.
It is therefore too early to answer questions about precisely what the tax reform will involve. I stated a number of principles that I believe to be fundamental when I presented the Government programme, and it is difficult to add anything else at this point in time. It is essential that Parliament completes its work and provides political input that has as broad a consensus as possible and is as precise as possible. In order to ensure the reform is introduced promptly, with definition of the relative implementing decrees, the Government will establish a committee of experts after the enabling law has been approved.
With regard to public administration payment time frames, the Government undertakes to focus on the monitoring that is already ongoing with the trade receivables platform run by the Ministry of Economy and Finance. At the same time, it shall further raise awareness among public administrations and local authorities in order to improve the processes required to speed up payment procedures. The NRRP’s measures to strengthen the public administration will also contribute to improving the payment situation.
Another point raised rightfully mentioned the debt that will be created with this Plan. At this point in time, however, I believe we must focus on growth; on economic growth and on sustainable growth. We want to relaunch investments and we need productivity to increase; this will allow us to record growth rates that, we hope, will be well above those of the past, and which will in turn reduce our debt-to-GDP ratio.
Another point mentioned was the importance of the third sector. I would like to stress that the value of this sector forms an integral part of the Plan, especially in the section dedicated to Social Infrastructure, Families, Communities and the Third Sector.
All three areas of intervention involve co-planning activities and require synergies between social enterprises, voluntary work and administration to be exploited. We are convinced that this will allow us to better understand people’s hardships and needs, therefore enabling us to respond to new marginalisation phenomena. The Plan also includes a commitment to complete the reform of the third sector.
Moving onto another point, for the Plan to be successful, a key target is the simplification of regulations governing public procurement and concessions; more generally speaking, this is necessary for the construction industry to recover. With regard to tender processes, we intend to reform Italian legislation based on three European Union directives (2014/23, 24 and 25). This legislation needs to become more streamlined than the regulations currently in force, also based on the legislation adopted in other EU Member States. An enabling law will be passed for this purpose, which shall be submitted by the end of 2021. We also intend to extend the simplifications adopted with Italian Decree Law no. 76/2020, until 2023.
Regardless of the NRRP, simplifying legislation and administrative procedures is a crucial objective for the Government. The Plan contains numerous measures to speed up implementation of the actions to be taken. Alongside the reforms, the Plan also indicates the relative time frames. Already in May, a decree law will be approved containing urgent simplification measures. This simplification process will of course then gradually continue until 2026, on an ongoing and constant basis.
I would like to conclude with a reference to sport. Italy has been crying out for a sports policy programme for years. The Plan includes investments worth EUR 1 billion in this field, meaning that, as of today, sport can enjoy a dignified position within our public policy landscape. There is a close link between sports activities, well-being and social cohesion. We intend to strengthen sporting infrastructure and to promote sport starting from the youngest primary school classes. The wider local community will also benefit from better sports facilities in schools, outside of the school timetable, through affiliations and agreements with the schools themselves, local authorities and local sports and amateur associations.