At what point is the implementation of the NRP? And should it be changed?
The challenges of the Meloni government in Europe and the point on the implementation of the NRP (according to a study by the Confindustria study center, the redefinition of tender prices is possible and desirable).
On Thursday Giorgia Meloni will meet in Brussels with the presidents of the most important EU institutions. It will be a contact, where the two issues of a possible dispute with the Commission will be set: the size of the budget deficit granted to Italy and the revision of the PNRR.
On this point it will be appropriate to define the scope of the problems, because both interlocutors support valid reasons why a common affidavit must be found. When Meloni states that the war and its consequences changed the context that had been the background of the NEGEU, she cannot be blamed; just as it cannot be given to the EU, which fears it will have to deal with a negotiation on the structure of the PNRR that would question the entire system or at least introduce a slowdown in execution.
But at what point is the implementation of the Plan with us? The issue has recently been addressed by the Confindustria Study Center (CSC) with the publication of a document (edited by Francesca Mazzolari and Stefano Olivari) containing detailed analyzes which we report in summary.
In the opinion of the CSC, so far the Italian Plan, in line with those of the other European countries, has been implemented in compliance with the agreed deadlines. All 51 conditions foreseen for 2021 and 45 foreseen by June 2022 have been achieved (the Commission has positively assessed the compliance of the latter and a decision is expected by ECOFIN by October) to allow the disbursement of the second installment from 21 billion euros.
A further 55 conditions will have to be met by the end of the year (4 in the third quarter and 51 in the fourth) in order to receive the third installment of 19 billion. The Draghi government had declared that it was aiming to reach 29 conditions by the end of October, leaving the remaining 26 conditions to the future government. According to the latest government statements, 21 of the 55 objectives and targets set for the end of the year had already been achieved by 5 October. However, the first signs of the real difficulties that – as feared – the country system would encounter are already emerging: (in) spending capacity.
The NaDEF 2022 – recalls the CSC – indicates that in the period 2020-2021 only 5.5 billion out of the 18.5 planned were spent, or less than a third of what was originally foreseen in the 2021 DEF. a halving of expenditure compared to what was assumed in the EFD of last April: of the 29.4 billion euros, probably only 15. Consequently, the expenditure of the 26.7 billion non-implementation in the three-year period 2020-2022 is postponed to the subsequent, with a substantial increase in the two-year period 2025-2026.
Overall, the extent of the postponement is worrying if we consider that the delay in spending by the State implies that these resources will reach the implementing bodies of the Plan (including local authorities) and the final beneficiaries of the measures (including businesses. ) later than expected and together with the other resources that it was planned to spend in those years. However, at least two factors – reports the CSC – could justify the observed spending postponements:
1. It may be that some investments have been made but have not yet been reported on. This hypothesis is all the more likely for those interventions that had been started before the approval of the PNRR, already in 2020-2021, and for which it was expected that national funding would be replaced with the resources of the Plan. For these it seems rather unlikely that the resources have not yet been spent.
2. for certain investments, the originally hypothesized programming may not have been consistent with the respective goals and objectives of the Plan. From the outset, the criteria with which the resources were quantified and temporally distributed for each investment were not clear, as there is no underlying technical relationship. Therefore, it is probable that the amounts were not commensurate with the real needs and spending capacity of the public administration.
The Report to Parliament of 5 October 2022 seems to confirm the previous hypotheses. With regard to the first hypothesis, the reporting system only reports the expenses for which full compliance with the PNRR legislation has also been verified and certified. For this reason, there are interventions for a total of 11.7 billion, mostly relating to "existing projects" prior to the Plan: Infrastructure and transport (3.6 billion), Transition 4.0 (3 billion), Ecobonus-Sismabonus (2.8 billion), Resilience and enhancement of municipal areas (1.2 billion), Innovative schools (396 million), SIMEST Fund Refinancing (398 million), Water resources management (181 million), Digitization (128 million). The Government expects that the expenditure actually disbursed at the end of the year will be in line with forecasts. On the other hand, with regard to the second hypothesis, namely that the programming of expenses was not adequately calibrated, there is no clear motivation, but it is admitted that the lack of disbursements is in line with the deadlines set by the Plan. Thus, the revision would appear to be related to the fact that they were not originally planned correctly. On the other hand – notes in CSc – some reprogramming was probably to be taken into account: the Plan was approved in mid-2021 and only from 2022 support measures were introduced to local authorities to facilitate and speed up the bureaucratic procedures. To these were added other factors, which could influence the achievement of these amounts on schedule.
The price increases, especially of energy, may not make it convenient for companies to participate in tenders, effectively leaving some projects unattainable: it would therefore be desirable to readjust the prices of tenders with funds raised either at national level (starting from the next budget law) or at a national level European (for example under the RePowerEU).
The lack of some materials can make it concretely difficult to make some investments on schedule. The association of building builders ANCE has quantified the higher costs for companies deriving from increases and shortages of materials in about 35% more than the prices already updated at the beginning of 2022.
The scarce economic convenience of some calls for tenders has certainly contributed to the fact that several tenders went deserted (eg some 5G calls). Some tender conditions were therefore amended, but in some cases this led to delays in implementation.
Then there remains the structural problem of the effective capacity of administrations, especially territorial ones, to announce and execute tenders following the distribution of PNRR funds. The quantitative achievement of some goals could be threatened by the high differences between the performances of the PAs in charge of achieving them.
Then there is the question of reforms: these are – the Note recalls – 23 conditions to be completed by the end of the semester. A revision of them is somewhat unlikely. The parliamentary bureaucratic procedures, which are troubled in themselves, are subject to strong political pressure and there is a tendency to proceed with decree-laws, sometimes postponing some crucial decisions.
Among the key challenges are the adoption of implementing measures for the competition law, the delegated acts for the reforms of civil, criminal justice and the insolvency framework and the entry into force of a national plan to combat undeclared work in all economic sectors. It would seem – therefore – that the departure of the government – the evaluation is ours – in many respects did not go in the direction of an acceleration ((postponement of the Cartabia Reform and competition law).
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/a-che-punto-e-lattuazione-del-pnrr-e-si-deve-modificare/ on Tue, 01 Nov 2022 10:39:31 +0000.