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Italy’s Recovery Plan will ‘change the fate of the country’ — Draghi

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What’s in the Italian Recovery Plan?

“We will have €248 billion, and we must triumph over corruption, stupidity, and vested interests,” insisted Italian Prime Minister Mario Draghi as he presented the plan to the country’s parliament on Tuesday.

The Italian parliament clearly agreed: Lawmakers in the Chamber of Deputies voted by 442 to 19 to support the plan, with 51 abstentions, and the Senate saw 224 members voting for the plan and 16 against, with 21 abstaining.

Now the Italian plan goes off to the European Commission on April 30, where it will be subject to discussion and negotiation before the final plan is determined within the next two months.

Cyprus is well ahead of Italy in this process, as our plan has already been in discussions with the Commission for several weeks. A major announcement is expected by the finance minister after Easter.

Can Italy do it?

Many have asked how a country as notoriously disorganised as Italy can attempt this massive project?

“The credibility of Draghi makes it possible,” explains Italian Minister for Public Administration Renato Brunetta.

“And the value is that Draghi’s Italy can run a deficit and debt without paying the consequences in the judgment of the markets.”

Essentially, Mario Draghi’s standing as former European Central Bank governor, and one who achieved an impressive record in this post, makes it possible. Europe will be watching, to see if Draghi can drive this programme through the immense Italian bureaucracy.

The Draghi plan breaks down into reforms and projects. There must be reforms to the tax system, the justice system, public administration and competition law.

Young people, women and the Italy’s underdeveloped South, are  the three transversal priorities.

“The Plan is divided into investment projects and reforms. The emphasis on reforms is fundamental,” explained the Prime Minister.  These not only allow the investments themselves to be effective and quickly implemented, but also to overcome the structural weaknesses they have. for a long time, growth slowed down and resulted in unsatisfactory employment levels, especially for young people and women.”

The share of ‘green’ projects is 40 per cent of the total. The share of digital projects is 27 per cent, as agreed with the EU Commission. The Plan allocates € 82 billion to the South of the 206 billion that can be distributed according to the territorial criterion, for a share of 40 per cent, the PM said.

“The National Recovery and Resilience Plan has three main objectives,” Draghi pointed out. The first is to repair the damage done by the pandemic.

‘Pandemic has struck Italy more harshly than its neighbours’

“The first, intended for the short-term, lies in repairing the economic and social damage of the pandemic crisis. The pandemic has affected us more than our European neighbours. We have reached the number of almost 120,000 deaths from Covid-19, and one must add the many never registered. In 2020, GDP  fell by 8.9 per cent, employment fell by 2.8 per cent, but the drop in hours worked was 11 percent, which gives a better measure of the severity of the crisis Young people and women  suffered a much higher than average drop in employment, particularly in the case of young people.”

The second phase, intended for the medium term, the Plan addresses some weaknesses that have plagued our economy and our society for decades: Territorial gaps, gender disparities, weak productivity growth and low investment in human and physical capital, Draghi said.

Finally, the resources of the Plan contribute to boosting a complete ecological implementation. Projects to protect the environment will be complemented by laws for energy transition.

And then the country’s reforms. “The reforms and investments are accompanied by quantitative objectives and intermediate targets and are organised in six ‘Missions:’ Digitization, innovation, competitiveness and culture for €50 billion; the green revolution and the ecological transition for €59.3 billion; infrastructures for sustainable mobility for €25.3 billion; education and research for €31.9 billion; jobs, inclusion and cohesion for €22 billion, also focusing on closing the gender gap; and health for €15.6 billion.

 

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