The major stimulus plan that could change Italy

With almost €200 billion in loans and grants, Rome has received the lion's share of 'Next Generation EU,' the European aid package set up following the Covid-19 pandemic. This could boost growth, particularly by financing infrastructure, provided it is well spent.

By  (Rome (Italy) correspondent)

Published on April 22, 2024, at 9:05 pm (Paris)

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The port of Genoa, whose modernization work has been financed since July 2021 by the European Investment Bank, on February 7, 2024.

At the crossroads of the Via Trieste and Via Gaspare Gozzi, in the city of Padua, in Italy's Veneto region, one of the many facets of a gigantic project is being worked on. All along a gutted roadway strewn with metal rods and rubble, workers from a subcontracting company, with two imposing excavators behind them, were checking that the future rails of a new tramway line were straight; under the watchful eye of the site manager, who was mindful of the project's tight schedule.

"Everything has to be finished before 2026. It's going to come very, very soon," said Johnny Viel, head of the Ferrari Ferruccio construction company, which won the Padua city authority's tender. There was a good reason for this: The extension of the city's transport network is one of some 230,000 projects of all kinds financed under Italy's National Recovery and Resilience Plan (PNRR), which is set to wrap up in 2026.

A major national cause of cyclopean proportions, whose many aspects have been discussed daily by the national and regional media, the Italian portion of the major European recovery plan "Next Generation EU" – set up following the Covid-19 pandemic – represents almost €200 billion in loans and subsidies. This amounts to the largest share granted to a European Union country out of the total of €800 billion planned for the entire EU.

Its initial version, which was finalized under former prime minister Mario Draghi's government (2021-2022), was reformed under the auspices of Italian Prime Minister Giorgia Meloni, after lengthy negotiations with Brussels. Its objective, however, remains the same: To unlock Italy's growth, which has previously been structurally weak, through major infrastructure, administrative modernization and reform projects.

Padua, with €644 million in resources, has received the largest amount of this funding per capita in Italy. In addition to new public transport systems, these funds will be used to finance projects to modernize administrative services, to create sporting facilities, daycare centers, cafeterias, urban renewal projects, bicycle paths and to improve public lighting.

The city has also served as a national model for the organization of resource allocation. Padua, then, is where the Italian recovery plan has been most successful in delivering on its promises. "At our level, the PNRR will truly help transform the city. We haven't seen such an investment effort since the Second World War," boasted Lorenzo Minganti, the municipality's director general, who was also proud of the new skills his administration had acquired through implementing the plan.

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