Recovery Fund: last call for Italy

The great opportunity: we have EUR 209 billion at our disposal of grants and interest-free loans to modernise the economy and and become a more resilient country. The big challenge: will the government be able to present a serious and credible reform package by 15 October? serious and credible reform package by 15 October?

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Recovery Fund

by Alan Friedman |The Recovery Fund will be available from early 2021, and indeed as early as this autumn Italy will be able to apply for part of the 209 billion euros guaranteed by Europe in grants and interest-free loans. This puts the country in front of some very important choices. Thisis aunique moment for the Belpaese .A moment of great opportunities, but also of great risks.

A historic opportunity

The risk I see on the horizon, as an economist, is that the political parties will look at the famous 209 billion as a 'little treasure' or a 'cake' to be divided up according to precise dividing lines. On the contrary, these funds must be allocated to a national plan for innovation, modernisation and social equity . My hope is that by the deadline of 15 October the government will present a series of responsible reforms, thus demonstrating that Italy is equal to this historic opportunity. It is a precious opportunity to push hard on the digitisation of the economy and the spread of broadband throughout the country, as well as to boost the green economy and offer inviting business opportunities to small enterprises.

The time is right to strengthen the resilience of the health system, invest in schools, reform civil justice, try again to reform the public administration, try again to liberalise the economy, engage in serious tax reformbased on the based on the principles of progressive taxation, not on populist demagogy.

But European funds are not meant to finance tax cuts. They should be used to cover the costs of helping those who have lost their jobs (Sure), to strengthen the health system (Mes), to finance investment in infrastructure and other job-creating measures (European Recovery Fund and EIB loans). In short, they must help Italy recover and become a more modern, fully European economy. This is why the name "Next Generation" was chosen.Next Generation”. Italy can use these funds to save itself and relaunch itself. But it is one of those trains that pass only once in a lifetime.

Revitalising the economy

The Italian economy will recover from the damage caused by Covid. Unless a big second wave arrives, the economy should improve further in 2021 and 2022. And this is the good news. But in 2022 we will be back to 2019 GDP, no more. And at that time our growth rate was a paltry 0.3%. So these funds are necessary, useful, to stimulate growth. The key words for the country are digitalisation and sustainability.Both represent a great opportunity to give a real boost to growth and the potential for technological innovation in Italy. This was also said by the Colao Report. But what has happened to Vittorio Colao's work? I hope it will be used and become an integral part of a national plan in October.

An important challenge

Paolo Gentiloni made the importance of European funds quite clear. The Commissioner for Economic Affairs - perhaps nowadays his is the most credible voice of the whole of Italy on the international stage - expressed a clear warning: the national plan that the Conte government is obliged to present must not be a simple "catalogue of expenses", but on the contrary must outline a clear and precise roadmap of the steps to be taken to modernise Italy, with new investments and a concomitant series of reforms. Gentiloni insisted on the need not to "waste this opportunity". He then stressed that Italy must present an organic and complete reform plan by 15 October. So now the responsibility is entirely on the shoulders of Palazzo Chigi. The responsibility is on the shoulders of Giuseppe Conte, the Grillini and the PD. Will this be an objective within the government's reach, despite the heterogeneity of its constituent components? Will Giuseppe Conte accept the Mes and keep the populist drift within the government at bay? We will soon find out the answer. Let us hope it is yes. Some of the reforms the country needs are the same ones that Berlusconi promised but never delivered, that Monti tried in vain to introduce, and that Renzi started but stopped halfway through. In short, everyone knows the steps to be taken to make the Italian economy more competitive by heart. The real question is whether the government will rise to the challenge that will be decided on 15 October. Let's hope so. Because perhaps the future of the next generation depends on it.


The full article is published in Issue 4 of Elettronica AV


About Alan Friedman

Alan FriedmanA journalist, television host, writer and economics expert, he has been a correspondent for the International Herald Tribune and a columnist for the Wall Street Journal. He began his career as an aide to President Carter's administration, created and hosted several RAI programmes, worked on the creation and launch of Rainews24 and in 2003 collaborated with Rupert Murdoch on the creation of SkyTG 24. During his career he worked as a journalist at the Financial Times in London, Alan Friedman has been awarded four times with the British Press Award. One of his most famous scoops was the discovery of the Iraq-gate scandal, the sale of arms to Saddam Hussein thanks to illicit financing carried out also through BNL, which involved the CIA. He is the author of nine best-selling books, including his latest effort "'This is not Italy' published by Newton Compton.

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