The Pnrr as a stress test for the Republic: lessons for the post-Pnrr

The Pnrr was a "stress test" for the Republic, and overall we passed it. Now the equally important and strategic post-PNRR game begins. How to capitalize on this experience to relaunch Italian growth in a stable way. This, in a nutshell, is the theme of the work - extraordinary for the balance and quality of the contributions - curated by Roberto Garofoli on behalf of the ANCI. Garofoli and the team he coordinates do the country a service: any force that aspires to govern or deal with government challenges would do well to draw on the content of these 800 pages.

It all begins with Next Generation Eu, an extraordinary page in the European story that I experienced firsthand in Brussels as Commissioner for Economic and Monetary Affairs.

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The European response: four consequences

Reflecting on that experience I came to four conclusions.

First. The European response in 2020 was rapid and up to the task. A week after the declaration of a pandemic by the WHO, on 18 March, the ECB launched the Pandemic Purchase Program and the Commission suspended the rules of the Stability Pact. Two decisions that stabilized the markets and prevented the dramatic Covid crisis, as had happened with the financial crisis ten years earlier, from causing an enormous divergence between European countries, based on their different financial capacities.

Second. By dividing the 750 billion Eurobonds not equally but favoring the countries most affected by Covid and most vulnerable, such as Italy, Next Generation Eu has even pushed towards convergence, favoring the growth of the countries of the South compared to those of the Centre-North.

Third, Next Generation Eu has introduced the so-called performance based method: disbursement of funds based on the achievement of objectives within defined times.

Fourth, it has changed the nature of relations between the Commission and individual countries.

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The role of the Commission has grown, and a method has been introduced that we also find in the new rules of the Stability Pact, based on medium-term plans negotiated between the Commission and member countries.

The limits of Next Generation Eu

Alongside these positive conclusions, Next Generation Eu also had installation limitations, well beyond the delays of this or that national plan. Two in particular.

On the one hand, the lack of resources dedicated to common projects. Some of the objectives indicated for example by the Draghi and Letta Reports could have benefited from part of the joint funding. An opportunity was missed.

The second limit emerged with the Russian invasion of Ukraine, which imposed profound changes during construction to the already operational national plans with negative consequences both on execution times and on the difficult balance between respect for objectives and flexibility.

The Italian answer