The European Commission endorsed last week a positive preliminary assessment of 54 milestones and targets linked to Italy’s third payment request under the Recovery and Resilience Facility (RRF), the key instrument at the heart of NextGenerationEU. On 30 December 2022, Italy submitted to the Commission a third payment request based on the milestones and targets set out in the Council Implementing Decision. After assessing the evidence provided by the Italian authorities, the Commission considered 39 milestones and 15 targets to be satisfactorily fulfilled. The 54 milestones and targets that have been satisfactorily fulfilled demonstrate significant progress in the implementation of Italy’s recovery and resilience plan. They cover wide-ranging transformative reforms in the areas of competition law, the justice system, public and tax administration, as well as education, the labour market and the healthcare system. The payment request also covers investments to foster the digital and green transition, and to improve support for research, innovation and education.
One target related to the number of new places in student accommodation was not covered by the assessment. Italy has requested to amend this target and replace it with a milestone related to the awarding of initial contracts for providing new places in student accommodation. This milestone will be added to the fourth payment request.
How do the milestones fulfilled by Italy under the third payment request effectively support the green transition?
The green transition is supported by reforms and investments linked to ten milestones included in the third payment request. The investments relate to the development of smart grids and efficient district heating networks, high speed railways, biodiversity and green ports; green investments in small islands and green communities.
Two investments target specifically the agri-food sector, aiming at making the production processes and the transportation and logistics phases more sustainable. The third payment also encompasses actions to support the reinforcement and digitalisation of the power grid infrastructure and to promote the green transition in ports, notably through the simplification of the authorisation process for cold ironing projects in Italian ports. Reforms also concern the promotion of environmental criteria for cultural events.
How do the milestones fulfilled by Italy under the third payment request effectively contribute to the digital transition?
The milestones associated to the third payment request include various important measures contributing to the digital transition, notably aiming at digitising the public administration and hospitals. Relevant milestones in this regard include the successful completion of the testing of the datacentres of the national cloud infrastructure – the so-called ‘Polo Strategico Nazionale’ – and the launch of the ‘National Digital Data Platform’, through which public administrations will be able to smoothly share and mutually access each other’s databases.
Furthermore, 35 new online services have been added to the website of the National Social Security Institute (INPS), for which digital skills trainings targeting 4250 employees have been launched. How do the milestones fulfilled by Italy so far contribute to improving Italy’s economic and social situation, and its resilience?
The adoption of an ambitious competition law will contribute to improve the business environment in several sectors cutting across the economy. Further steps taken in the implementation of the reforms of the public administration and justice will help make the system simpler and more effective. The strengthening of the ex-post evaluation framework for spending reviews and the efforts made to increase tax compliance are expected to positively contribute to public finance management.
The labour market reforms will contribute to combat undeclared work, while improving employment prospects for workers by better tailoring activation and training services. More than 300 000 people have been reached by ‘GOL’, the flagship programme of the reform that is expected to reach at least 3 million people. An accompanying investment has started strengthening public employment centres too. Labour market inclusivity is expected to benefit from the investment in the Gender Equality Certification System for firms, which is expected to promote inclusive corporate policies in areas such as equal pay, maternity protection, management and career development policies.
The third payment request also includes a set of reforms to improve educational outcomes of the country’s overall education and training system, for instance by reforming the technical and professional institutes and strengthening the tertiary vocational training system (ITS), thereby bridging the gap between labour supply and demand and investing in STEM courses and digital and innovation skills.
Does the achievement of these milestones contribute to an effective implementation of the Plan?
Following the first two payment requests, the fulfilled milestones under this third payment request constitute another significant step in the implementation of Italy’s recovery and resilience plan, and of its broader reform agenda. For example, in the areas of education, justice, competition and labour market. At the same time, this was the first Italian payment request including a significant number of quantitate targets. The implementation of the RRP is gaining momentum, rolling out investments on the ground.
What is included in the targeted revision ahead of the fourth payment request?
Italy has requested to make targeted amendments to measures included in its plan under the fourth payment request. The Commission’s positive assessment of this request was adopted today. The targeted changes concern measures on accelerating and prioritising energy efficiency interventions under the so-called ‘Superbonus’, the expansion and development of childcare facilities, the development of the space industry, of the film industry (namely, Cinecittà), sustainable transport, boosting and greening the railway sector, support for research and development activities in the industrial sector, financial support for women-led enterprises, and fostering the non-profit sector in Southern regions, including for education and training purposes. Amendments to correct clerical errors are also included. As mentioned above, a new milestone related to new places in student accommodation will be added to the fourth payment request.
Following an assessment of Italy’s proposed modifications, the Commission concluded that the Italian plan still complies with the criteria set out in the RRF Regulation. Importantly, the Commission has found that the plan’s overall ambition is not affected by the amendments, thanks to their targeted nature.
What are the next steps?
In line with Articles 21 and 24 of the RRF Regulation:
*As regards Italy’s third payment request, the Commission has now sent its positive preliminary assessment of the milestones and targets that Italy has satisfactorily fulfilled to the Economic and Financial Committee (EFC), asking for its opinion. The EFC’s opinion, to be delivered within a maximum of four weeks, should be taken into account in the Commission’s final assessment. Following the EFC’s opinion on the positive preliminary assessment, the Commission will adopt the decision on the payment, in accordance with the examination procedure, through a comitology committee. Following the adoption of the decision by the Commission, the payment of €18.5 billion to Italy can take place.
* As regards Italy’s targeted revision of its plan, the Council will now have, as a rule, four weeks to adopt the Commission’s endorsement of Italy’s proposed changes to the fourth payment request.
The Commission will assess further payment requests by Italy based on the fulfilment of the milestones and targets outlined in the Council Implementing Decision, reflecting progress on the implementation of the investments and reforms. The Commission strongly encourages all Member states, including Italy, to proceed with the timely implementation of their respective recovery and resilience plans.
