Pro Pnrr reforms: ends, means and risks
Giuseppe Liturri's analysis
“ If I think I can do it? Often enough I did it, I … And this time it will be the government that will succeed ”.
With these words, the Prime Minister, Mario Draghi, commented a few days ago on the difficulty of carrying out the tax reform with a proxy law to be approved by 31 July. And the improvident outputs of Enrico Letta Tax succession certainly not facilitate the work.
In fact, Draghi has a difficult task ahead of him, if only for the impressive amount of work he is facing his government and Parliament: horizontal reforms (public administration and judicial system), enabling reforms (simplification and promotion of competition), sectoral and accompanying reforms (tax and social safety nets). To be carried out by decree laws, for the most urgent aspects, by delegation laws (from Parliament to the Government) and legislative decrees by the Government. A shock wave of 53 legislative measures awaits the Parliament according to a fixed calendar that starts from May and will also go beyond the term of the legislature in March 2023.
The execution of those reforms, within the set times, is an essential condition for receiving the half-yearly payments of the Resilience and Resilience Facility (RRF), which constitutes a large part of the EU Next Generation.
To be able to stay on time, the watchwords are two: simplify and accelerate. And to this end, the decree approved by the council of ministers on Friday 28th is only the first , but exhaustive, taste of what awaits us and is also a palpable demonstration of who pulls the strings of the whole game: the Commission.
The regulatory pruning process is massive. It starts with the simplification of public contracts, to be implemented with a delegated law by 2021 and delegated decrees within 9 months. But the first urgent measures are to be implemented by decree law which aims to modify the notorious procurement code allowing the award at the maximum discount and eliminating the constraints on subcontracting. And on this the CGIL immediately spoke in no uncertain terms about "breaking social peace " and "returning to the jungle of the construction sites of the 1950s". To this are added simplification measures in environmental matters, with the introduction of a special state "VIA". Same story in the field of construction and urban planning: the method of implementing the superbonus 110% has been simplified.
The greatest duty that Italy will have to pay to have the public investment plan financed is manifesting itself in all its clarity: the slavish obedience to a calendar of legislative interventions of various kinds, the content of which is substantially predefined in about 40 pages. of the Recovery Plan sent to Brussels on 30 April.
One of the pillars is precisely that of administrative simplification. It is in fact quite clear that spending about 240 billion until 2026 (between Next Generation and the National Complementary Fund) is a practically impossible undertaking with the current structural endowment of the PA in terms of means and men and with the current regulatory apparatus at their service.
If we consider that as of 28 February 2021, the 50 billion of structural funds (of which 16 of national co-financing) of the 2014-2020 programming are committed for 77% and spent for 47%, it is understood that this is not a rate of expenditure compatible with that envisaged by the EU Next Generation.
And then from Brussels they ask to prepare first of all the instrument that should clear the field from the many checks and procedural steps that are a safeguard against corruption, waste, embezzlement and that protect safety at work.
We will certainly not be defending the regulatory jungle that slows down public investment and private initiative, but it must be admitted that the ferocious deforestation of rules and procedures and the peremptory shortening of project processing times and authorizations leads to a decrease in capacity of control and the correlated increase in the risk of corruption and mafia infiltration.
It is precisely the exceptional nature of these simplification measures that raises concerns. Of the two, one: if it is almost always rightly believed that the authorization processes of public (and even private) investments are cumbersome, slow and suffer from duplication, then these processes must be structurally modified. Not only because Europe asks us to do so and investments are included in the PNRR. If, on the other hand, it is believed that certain regulations are an irreplaceable safeguard to protect the safety of jobs and public finances and against corruption, then eliminating or suspending them temporarily could create more problems than it intends to solve.
Instead, the structural interventions are modest and the logic of exceptionality prevails. Timed rules, exceptional substitute powers, ad acta commissioners.
So we end up between Scilla and Cariddi. We must run otherwise we do not receive payments, but to run we must simplify and then we expose ourselves to the risk of losing payments due to corruption or simple bad gestures.
An article from the French newspaper “ Le Figaro ” dated May 16 stating that “ in Italy the mafias have already moved their pawns, taking control of companies weakened by the crisis, to appropriate the subsidies destined for the country ”. However, in the PNRR the Government argues that " regulatory simplification is in general an effective remedy to avoid the multiplication of corruption phenomena ".
We fear that in Brussels they do not think the same way. In fact, OLAF (European anti-fraud office) and EPPO (European prosecutor who from 1 June will have the task of fighting fraud against EU finances) are already in a state of maximum alert and the recent Regulation on the protection of the EU budget it is a very sharp cleaver in their hands.
Similarly, when we read in the PNRR that " the sector of forced execution deserves particular attention because of the centrality of the forced implementation of credit for the purposes of the competitiveness of the country system", we fear that this reform could only improve the accounts of those it will buy the tens of billions of bad bank loans ready to pour into the market after an epochal recession at a final price.
Also in this case, we do not want to deny that shortening the time of civil justice and deflation of litigation are a desirable public good, but this emphasis on "creditor protection" is quite perplexing, just when a season of inevitable growth is approaching. of bad bank loans. Isn't protecting the debtor also a public good? Or do you want to have bankruptcy auctions full of sellers, resulting in a collapse in property values?
The last time we made the reforms “because Europe asks us” it didn't end very well and we plunged into almost three years of recession.
We hope Mario Draghi remembers it.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/riforme-pro-pnrr-fini-mezzi-e-rischi/ on Sat, 29 May 2021 17:40:08 +0000.