Italy’s NRRP: PM Draghi’s address to the Chamber of Deputies
Monday, 26 April 2021
[The following video is available in Italian only]
Honourable President, Honourable Deputies,
we would all be mistaken in thinking that, despite its historical importance, the National Recovery and Resilience Plan (NRRP) is nothing more than a collection of projects, as necessary as they are ambitious, figures, targets and deadlines. I would like to invite you to read it from a different point of view, imagining the lives of Italians - our lives but above all the lives of young people, women and this country’s future citizens. Read it thinking about the expectations of those who have been hardest hit by the devastating effects of the pandemic; the aspirations of families who are concerned about their children’s education and future; the rightful claims of those without a job or who have lost their job; the worries of those who have had to close their businesses in order to allow all of us to curb the contagion; the desire of disadvantaged areas to break free from hardship and poverty; the awareness shared by all communities that we need to protect and respect the environment.
The plan that I am submitting for your attention today refers, above all, to the fate of our country: how important a role it will play in the international community and its credibility and reputation as a founder of the European Union and major player in the Western world. It is therefore not merely a question of income, employment and well-being, but rather also refers to civil values and the feelings of our national community, which no figure nor data table could ever convey.
I am saying this because I want it to be clear that, in the process of implementing these projects, any delays, inefficiencies or biased short-sightedness put before the common good, shall take a direct toll on our lives. I am especially referring to the lives of the weakest members of society, and of our children and grandchildren. Should this happen, we will perhaps run out of time to fix things.
In submitting this document, which is so closely linked to our future, I would like to quote one of the founding fathers of the Italian Republic. This quote is particularly pertinent following yesterday’s celebrations to mark Liberation Day.
In 1943, Alcide De Gasperi wrote:
“It is true that, to work, an economic democracy demands disinterestedness, just as a political democracy implies righteousness.
The revival process shall fail unless, in all categories and in all centres, disinterested men – today, we should say people – are ready to work hard and sacrifice themselves for the common good.”
We now have the duty and the honour of preparing the Italy of tomorrow in the best way possible.
Before moving on to describe the Plan, I would like to thank you for the valuable talks held by Parliament with other institutions and social partners. In order for this Plan to be successful, there needs to be a collective effort by all the institutions involved, as well as open and constructive dialogue. In just a short time, Parliament successfully completed a huge amount of work to sum up the observations and requests received from numerous institutional bodies, trade associations and experts, which greatly helped to finalise the Plan. This work went hand-in-hand with intense cooperation between the various Ministries involved in drawing up the Plan; these efforts benefited greatly from the work carried out by the previous Government. I would also like to thank the regional authorities, provinces and municipalities, whose role goes beyond these consultations. The success of the Plan will, in fact, depend on these local authorities.
The Plan has three main objectives. The first is more short-term in nature and refers to repairing the economic and social damages caused by the health crisis. Italy was harder hit by the pandemic than its European neighbours, recording almost 120,000 Covid-19 deaths in addition to all those that were not recognised as such. In 2020, Italy’s GDP dropped by 8.9 per cent, employment fell by 2.8 per cent and working hours were down 11 per cent, reflecting the seriousness of the crisis. The drop in employment was well above average for young people and women, especially for those aged between 15 and 24. The employment and income support measures introduced for workers considerably softened the social impact of the pandemic, although this continued to be most felt by the weakest members of the population. Between 2005 and 2019, the number of people below the absolute poverty line rose from 3.3 to 7.7 per cent, reaching just under 10 per cent in 2020. Once again, women and young people were among the worst hit, especially those living in our southern regions.
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 inequalities 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 Plan is organised into investment projects and reforms. The emphasis on reforms is crucial as these will not only allow for investments to be implemented quickly and efficiently, but will also allow us to overcome the structural weaknesses that have slowed Italy’s growth and generated an unsatisfactory level of employment for so long now, especially among young people and women.
The reforms and investments are accompanied by quantitative targets and interim milestones and are organised into six Missions.
Incidentally, all of this can be checked and monitored via an online platform. The projects belonging to each mission aim to tackle Italy’s three structural issues, which form cross-cutting objectives for the Plan as a whole: namely, overcoming the regional differences divides the south of the country and its central-northern areas, solving gender inequalities and bridging generational gaps. The EU Recovery and Resilience Facility is making EUR 191.5 billion available to Italy.
The Government has decided to earmark an additional EUR 30.6 billion to finance a complementary national fund alongside this EU facility. This complementary fund shall finance projects that are in line with the strategies contained in the NRRP, but that exceeded the resources available from the EU facility. The NRRP and the relative complementary fund have been designed in an integrated way: the projects covered by the complementary fund will, in fact, have the same implementation measures. An additional EUR 26 billion has been earmarked for the completion of specific works, to be paid out by 2032. These include the Salerno-Reggio Calabria high-speed railway line – high-speed in the true sense of the word – and the work to have the Milan-Venice high-speed line run through Vicenza.
Development and Cohesion Fund resources are also set to be reinstated, as part of the EU facility to boost the projects covered by said fund, for a total of EUR 15.5 billion.
A total of EUR 248 billion is therefore available for Italy. In addition, there are also the EUR 13 billion in resources made available by the REACT-EU programme, which will be spent between 2021 and 2023 as provided for by EU legislation.
Taking into consideration only the NRRP and the relative complementary fund, ‘green’ projects make up 40 per cent of the total, with digital projects representing 27 per cent, in accordance with the rules that we all agreed upon at EU level. The NRRP dedicates EUR 82 billion to southern Italy out of the EUR 206 billion that can be spent on the basis of the geographical criterion, therefore representing 40 per cent of the total. There is a strong focus on gender equality and support for young people.
The Plan will have a significant effect on the main economic variables. In 2026, Italy’s GDP will be approximately 3.6 percentage points higher compared with a reference scenario that does not take the Plan’s implementation into account. Employment will also benefit and will be 3.2 percentage points higher than the baseline scenario for the 2024-2026 three-year period.
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 if we manage to implement efficient reforms aimed at improving our economy’s competitiveness.
The Plan’s governance is structured on several levels. Ministries and local authorities are responsible for implementing the initiatives and reforms as well as for managing the relative financial resources; this will require a huge amount of effort in terms of organisation, planning and management. The Ministry of Economy and Finance will be in charge of monitoring, supervision and reporting and shall also ensure ongoing contact with the European Commission. Lastly, there will be a steering committee within the Presidency of the Council of Ministers which shall liaise with the administrations in charge if critical issues arise with the Plan’s implementation. I would like to stress the important role of regional and local authorities with regard to implementing the Plan. They are in fact responsible for making investments worth around EUR 90 billion, representing approximately 40 per cent of the total, with particular regard to the ecological transition, social inclusion and cohesion and health.
The first Mission regards Digitalisation, Innovation, Competitiveness and Culture. A total of approximately EUR 50 billion has been earmarked for this Mission, EUR 41 billion of which shall come from the EU facility, with EUR 8.5 billion being made available by the complementary national fund. 27% of the Plan’s total resources are therefore being dedicated to this Mission, whose main objective is to promote and support Italy’s digital transformation and industrial innovation. We have chosen to invest in scaling up Italian companies and in high-tech production chains.
With regard to digitalisation, we often speak about fibre optic cable, cloud computing, 5G, digital identities, telemedicine and the many other technologies in which we are planning to invest. However, it is also important to keep in mind the reason why digital transformation is so essential for our country.
By 2027, we want young people, wherever they are in Italy, to have access to top-quality education.
We want both small and large-scale entrepreneurs to be able to start and develop their businesses quickly and efficiently.
We want female entrepreneurs to be able to turn their ideas into a reality.
We want workers to continue developing their skills for both existing and future professions.
We want people who are alone or vulnerable to be assisted by healthcare workers, volunteers and family members in the best and quickest way possible.
We want people to have unhindered access to public administrations and their services, free of charge and without any pointless delays.
We therefore want technology to be adopted faster by both the public and private sector and within households in order to achieve equal opportunities for everyone by the end of the 2021-2026 five-year period. I would like to stress again that this refers particularly to young people, women and those living in less connected areas.
With regard to culture and tourism, representing two key sectors for Italy, also on account of the important contribution they make to our country’s identity, the first course of action refers to enhancement measures for historical and cultural sites. These measures aim to improve the attractiveness of such sites, as well as their safety and accessibility. The relative investments will not only target ‘big attractions’, but will also protect and enhance smaller sites. In addition, measures will also be introduced to upgrade tourist facilities and services in an environmentally sustainable way, leveraging also on new technologies.
The Plan does not overlook the fact that digitalisation measures and greater innovation must be implemented synergically across all sectors and focus areas. Indeed, many measures that I will be mentioning regarding other Missions, in relation to Education and Research or Health for example, shall complete the Government’s strategy in this area.
The second Mission, entitled ‘Green Revolution and Ecological Transition’, refers to the major issues of sustainable agriculture, the circular economy, the energy transition, sustainable mobility, the energy efficiency of buildings, water resources and pollution.
These issues are particularly important for us, as Italy is more exposed to the risks caused by climate change than other countries, due partly to its orography, partly to its misuse of land and partly to the delicate nature of the environment here. This Mission aims to improve the sustainability of the economic system while ensuring an equitable and inclusive transition towards a society with zero environmental impact.
Out of the six Missions, this one shall receive the most funding (almost EUR 70 billion, of which EUR 60 billion will come from the EU facility). There will also be investments to support the ecological transition as part of other Missions, such as measures to improve waste management and develop the circular economy, as well as to strengthen infrastructure for waste sorting and modernise or develop new waste processing plants.
In order to achieve gradual decarbonisation, measures will be introduced to significantly increase the use of renewable energy, to strengthen networks and to develop more sustainable mobility. Significant efforts will be made to improve the energy efficiency of both public and private buildings, with over EUR 18 billion from the NRRP and the complementary fund being earmarked for the ‘110% Superbonus’ tax incentive, matching the resources set aside by the previous Government. There will therefore be no cuts. This incentive shall receive funding until the end of 2022, with an extension to June 2023 for social housing only (IACP). This is an important initiative for both the construction industry and the environment.
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 in terms of financial effects, the nature of the work carried out and the extent to which energy saving and safety targets have been met for the buildings in question.
This Mission also includes measures to make at-risk areas more secure, carrying out prevention and redevelopment work where there are significant hydrogeological risks; it also protects green areas and biodiversity and makes provisions to remove water and land pollution and to improve the availability of water resources.
Mission 3 plans a series of investments to develop a modern, digital, sustainable and interconnected transport infrastructure network. A total of EUR 31 billion has been earmarked for this purpose. The majority of funding will go towards modernising and strengthening the railway network, with plans to complete the major high-speed, high-capacity lines (at an estimated cost of EUR 13.2 billion), to integrate the latter with regional railway lines and to ensure the safety of the entire network.
Measures will also be taken to digitise logistics, improve the safety of bridges and viaducts and boost the competitiveness, capacity and productivity of Italian ports.
Mission 4, Education and Research, focuses on the key factors for a knowledge-based economy. In addition to clear benefits in terms of growth, these factors also play a decisive role in achieving social inclusion and equity. The Plan’s proposals aim to strengthen Italy’s education system at all levels, support research and help integrate this into industry.
The main measures refer to:
- improving the quality and quantity of educational services, starting from the number of nursery and pre-school places and the early childhood education and care services available;
- developing and strengthening vocational training;
- teacher recruitment processes and training;
- strengthening and modernising school infrastructure, for example the wiring inside approximately 40,000 schools;
- reforming and broadening PhD courses;
- strengthening research and disseminating innovative models for both basic and applied research, carried out by universities and companies working in synergy;
- lastly, supporting innovation processes and the transfer of technology.
Almost EUR 32 billion will be dedicated to this Mission, of which EUR 1 billion will be financed with our national resources, with the remaining EUR 31 billion coming from the EU facility.
The fifth Mission is dedicated to active labour market and training policies, social inclusion and territorial cohesion. A total of over EUR 22 billion has been earmarked for these objectives, with measures worth an additional EUR 7.3 billion being funded by REACT-EU resources. There will be investments to train and reskill workers. A systematic and integrated reform will be introduced regarding active policies and training, as well as specific measures to boost youth employment. Support measures for female entrepreneurship have also been provided for, as has a gender equality certification system to support and encourage companies to adopt policies able to reduce the gender gap.
The choice has also been made to invest significant amounts in social infrastructure, allowing for policies to support families, children, people with serious disabilities and elderly people who are not self-sufficient. Alongside these policies, measures will be introduced to redevelop the most vulnerable urban areas (peripheries, the country's inner areas) as well as to strengthen public housing schemes.
Mission 6 refers to Health, representing a critical sector that has faced historic challenges over the last year. The Covid-19 pandemic has confirmed the universal value of health, the fact that it is a fundamental public good and the macroeconomic importance of public health services. The Plan’s reform and investment proposals in this field have two main objectives: to strengthen prevention and local health services and to modernise and digitalise the healthcare system in order to guarantee equal access to effective treatment.
With regard to local health services, I would like to underline that a significant increase in home care services is planned, which should cover 10% of care provided to the over-65s by 2026, especially those with chronic conditions or who are not self-sufficient.
Local health services will also be improved by strengthening and creating local facilities and units (such as community homes and community hospitals) and boosting home care, as well as developing telemedicine and a more efficient integration between all social and health care services.
In addition to these measures, there will also be initiatives to: upgrade and modernise existing IT and digital infrastructure; complete and ensure widespread use of electronic health records; and, improve the ability to provide and monitor essential levels of care. Significant resources are also earmarked for scientific research and to encourage the transfer of technology, as well as to strengthen skills and human resources within our National Health Service. In the wider field of social and health care, we will be introducing an important reform for people who are not self-sufficient, with the main aim of providing solutions to problems faced by the elderly. This measure represents a coordinated response to people’s various needs as they grow older.
We want to put elderly Italians in a position to maintain or regain the greatest level of independence possible, within a context that is as ‘deinstitutionalised’ as possible. After the suffering and fear experienced during the pandemic, we must certainly not forget these members of our population.
I shall now move on to look at the Plan’s impact on women, young people and southern Italy. In order for Italy to recover, the obstacles hindering female participation in the labour market must be removed. The Plan takes action regarding the various dimensions of the gender gap, forming part of the reform process first launched with the Family Act. By the end of June 2021, the Government intends to launch the 2021-2026 national gender equality strategy. The NRRP develops the priorities of this national strategy and organises them as part of a far-reaching programme.
EUR 4.6 billion will go towards building nurseries, pre-schools and early childhood education and care services.
Almost EUR 1 billion will be spent to extend full-time schooling in primary education, thereby allowing families, and mothers in particular, to better balance their personal and professional life.
The Plan dedicates EUR 400 million to female entrepreneurship, as well as earmarking over EUR 1 billion for the development of technical and scientific skills, especially among female students.
Lastly, thanks to the action taken by this Parliament, the ‘assegno unico’ [universal single allowance] will become the central and all-encompassing benefit for families with children, replacing the fragmented measures that were in place until now.
This reform represents a change in paradigm for family policies and measures to support the birth rate.
A Plan that looks to the next generations must inevitably acknowledge our current demographics.
Italy has one of the lowest birth rates in Europe, equal to just over 1.3 children per woman compared with the EU average of almost 1.6.
To ensure young people are in a position to be able to start a family, three requirements must be met, as proven by recent surveys: an adequate welfare system, a home and job security.
In addition to the plan for more nurseries, young people will also benefit from the social infrastructure and public housing measures.
Furthermore, an upcoming decree that is about to be approved also dedicates additional resources to helping young people enter into mortgage contracts and buy a home. In particular, in addition to significant tax breaks, a State guarantee will be introduced for down payments.
EUR 1.8 billion will go towards boosting the competitiveness of tourism enterprises, a significant portion of which is earmarked for encouraging the under-35s to start new businesses in this sector.
We will be strengthening our ‘Universal Civil Service’ for young people aged between 18 and 28, investing EUR 650 million during the 2021-2023 period. This is a form of active citizenship and, at the same time, a training tool for young people and a driver for social inclusion and cohesion. It is indeed a way for young people to work out the direction in which they would like to develop their careers, while providing a noble service to their community and the country as a whole.
Also with regard to young people, we will be investing EUR 600 million to strengthen the dual system and to bring education and training more in line with labour market requirements. This initiative will boost youth employment at the same time as meeting businesses’ needs in terms of skill sets.
Other measures include initiatives focusing on the key role played by sport in youngsters’ education. The Plan dedicates EUR 1 billion to youth sports facilities, partly to provide new gyms and sports equipment in schools and partly to strengthen the role of sport in nurturing social inclusion and combatting marginalisation.
In more general terms, young people will be among the main beneficiaries of the Plan as a whole. Ecological transition investments and reforms will mainly generate youth employment.
Digitalisation measures will naturally lead to job opportunities for young people, as well as completing the process to ensure schools are connected.
The Plan includes a specific focus on people with disabilities as part of the measures being introduced to bridge the gap between high school education in different areas of the country. The actions planned to improve mobility, local public transport and railway lines will also enhance and increase the accessibility of infrastructure and services for all citizens. Special investments will be made in social infrastructure as well as in community social and health care services and services in the home, allowing people with disabilities to become more independent. Improving local health services will allow for truly universal access to public health care.
Lastly, a framework law on disability is also planned to simplify access to services and disability assessment procedures. As part of the process to implement the Plan, the National Monitoring Centre for the conditions of disabled people shall check that the proposed reforms are suitably inclusive.
Boosting growth in Italy’s Mezzogiorno is another priority that features throughout the Plan. The potential of our southern regions in terms of development, competitiveness and employment is as large as the current gap with the rest of the country. This is not about parochialism: if the South grows, Italy grows.
Over 50 per cent of infrastructure investments are dedicated to the South, especially regarding high-speed railway lines and ports. EUR 23 billion will be spent on circular economy, ecological transition, sustainable mobility and land and water resource protection measures in these regions. Alongside these investments, there will be a reform of Special Economic Zones and significant financing for the relative infrastructure.
Between 2021 and 2026, we are expecting GDP in the south of Italy to increase by almost 1.5 times more than the national GDP growth rate. The aim is to make the country’s southern regions more attractive to private investors and innovative enterprises.
As I have already mentioned, the NRRP is not only an investment plan; it is also, and above all, a programme of reforms. The reform of the justice system tackles structural issues with civil and criminal proceedings. Despite the progress made in recent years, there are still excessive delays. On average, more than 500 days are required to complete a civil lawsuit in a court of first instance in Italy, compared with approximately 200 in Germany.
The Plan also reviews how courts are organised and creates a ‘Lawsuit Office’ to support magistrates during the initial phase of gathering knowledge of each case.
With regard to the civil justice system, court of first instance and appeal proceedings will be simplified and electronic proceedings will definitively be introduced, as per the Senate’s recent request.
The Government intends to reduce the unacceptable case backlog in Italy’s courts and shall create the right conditions to avoid this from building up again. This is one of the most important and explicit commitments that we have made vis-à-vis the European Union. The objective we are setting ourselves is ambitious: reducing time frames by 40 per cent for civil proceedings and by at least 25 per cent for criminal proceedings.
We all want a justice system that is structurally more efficient and one that can provide higher quality responses.
The second system reform refers to our public administration and we must bear in mind that several factors affect the latter’s ability to provide efficient and effective responses. These factors include: the existence of several layers of legislation; a limited and unequal digitalisation process; poor investment in human resources; a lack of generational change; and, a failure to refresh know-how and skills.
The reform will make changes in four main areas:
- recruitment and competitive hiring processes, by streamlining recruitment procedures and planning staff levels in such a way as to ensure efficient service provision for both companies and citizens;
- sound administration, by simplifying the relative framework of regulations and procedures;
- skill enhancement, thanks to career reviews, continuous staff training and professional development;
- digitalisation, by investing in technology, creating units dedicated to process simplification and reorganising offices.
Moreover, by the end of May, we will be submitting a decree that includes mainly structural provisions aimed at favouring implementation of the NRRP and the relative complementary plan.
As well as important simplifications to the procedures used to assess and implement infrastructure investments, regulations governing pubic procurement and concessions will also be simplified.
Another of the Plan’s objectives is to commit the Government and Parliament to ongoing and systematic work to repeal and amend regulations that hinder competition, create privileged positions and have a negative effect on citizens’ well-being. These are essential principles for the Plan to be successful: we must prevent the available funds from ending up only in the hands of monopolists. In this regard, a crucial role will be played by the annual competition law, which has been provided for in our legal system since 2009 but has only been implemented once, back in 2017.
We intend to introduce regulations aimed at facilitating business in strategic sectors, such as digital networks and energy. Some of these regulations are already identified in the Plan, such as the completion of tender obligations for concession schemes, and simplification of the authorisation process to build waste management plants.
The Government is committed to mitigating the potentially negative effects of some of these measures, by strengthening regulatory mechanisms and social protection.
I wish to thank this Parliament for the political impetus behind the whole Plan: the fact that all measures pay attention to the environment, young people, women and the south of Italy is first and foremost thanks to your work.
I am certain that we will manage to implement this Plan. I am certain that honesty, intelligence and a taste for the future shall prevail over corruption, stupidity and vested interests.
This certainty is by no means foolish optimism; it is instead about trusting in Italians, my fellow citizens, and our ability to work together when an emergency situation calls for us to show solidarity and responsibility.
I trust that my appeal to our republican spirit will be heard and that this will translate into concrete action to build our future; these are the bases on which I am submitting this Plan to Parliament today.