The national recovery and resilience plan (Pnrr) is a document that aims to illustrate to the European Commission the planning of the investments of the funds that will be allocated within the Next generation Eu (Ngeu) program.
The Ngeu is part of a broader operation that aims to encourage the post-pandemic economic recovery of the member states of the union. At the same time, in fact, the stability and growth pact, a set of rules that have the purpose of coordinating the financial policies of European countries, was suspended, and further support packages were adopted. For almost 90% the Next Generation finances the national plan for recovery and resilience, with 723.8 billion euros. The main objective is to mitigate the economic and social impact generated by the health crisis.
To this end, two main financial instruments to support investments have been devised:
– the React-EU, a program linked to the short term (2021-2022) which aims to help economies in their immediate recovery;
– the Recovery and resilience facility (RRF) which has a duration of six years and was established with the aim of structuring lasting changes, set out in the Pnrr, mainly linked to digital innovation, ecological transition and social inclusion.
– The Rrf provides for expenditure of 672.5 billion euros to be divided among the member states. Of these, 360 billion euros will be disbursed through loans at subsidized rates while 312.5 will be non-repayable grants, i.e. contributions for which no repayment will be requested. The financing of these expenditures for the union takes place through the classic sources of income for the EU (customs duties, contributions of the member countries on VAT, contributions on gross national income) and loans on the financial markets at more favorable rates than those that individual states would get.
The allocation of grants to countries is defined by a number of criteria:
– 70% of the funds are allocated on the basis of the number of the state’s population, the inverse of the ratio between its gross domestic product (GDP) per capita and the EU average and its unemployment rate recorded between 2015 and 2019 compared to the EU average;
– instead of the unemployment rate, the 30% take into consideration the loss of GDP net of inflation in 2020 and the observed cumulative loss of real GDP in the period 2020-2021, based on a forecast made in autumn of 2020 which will then be updated by 30 June 2022 with the actual values recorded in that period.
It is also possible for member states to apply for loans that must not exceed 6.8% of the gross national income recorded in 2019. From a technical point of view, a revolving fund has been set up for the management of financial flows between the European institutions and Italian. The resources are managed directly by the state accounting office which has set up two non-interest bearing current accounts in the treasury, ie which do not generate interest on what is paid. One is related to loans (‘loans’) and another to grants (‘grants’).
The regions and local authorities have a fundamental role in understanding the needs and requirements of the population. They contribute directly to the creation of the Pnrr as implementers of specific projects, final recipients of some works and participating in the definition and implementation of the planned reforms. To access the funds, it is necessary to participate in the tenders or notices issued by the competent ministries through which the projects to be financed are selected. The resources are then allocated directly by the Mef, through payments into treasury accounts.
The 6 missions of the Pnrr
The Pnrr is made up of six missions, i.e. goals to be achieved through funding, which in part recall those already present in the Next generation Eu.
– mission 1: digitalisation, innovation, competitiveness and culture. Each national plan will have to include 20% of spending for the digital sector;
– mission 2: green revolution and ecological transition, to which at least 37% of the fund must be dedicated;
– mission 3: infrastructure for sustainable mobility;
– mission 4: education and research;
– mission 5: inclusion and cohesion;
– mission 6: health.
How much Italy receives
The Italian Pnrr provides for a total of 358 measures and sub-measures, of which 66 are regulatory reforms and 292 economic investments. Each measure has different deadlines to be respected, on a quarterly basis, over one or more years from 2021 to 2026. Italy is bound by the EU institutions to complete deadlines and measures within the set deadlines, under penalty of non-disbursement of funds. A verification process that takes place every 6 months and which is the responsibility of the European Commission.
Pnrr, Crosetto: “We don’t know how to spend 200 billion, we only take the funds we will use”
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Italy will receive over 210 billion euros of resources from the Next generation Eu programme. Added to these are 80.1 billion deriving from the European planning of the new five-year budget.
The programming implemented by the Italian government is based, in particular, on three priorities also in line with those dictated by the EU, namely digitization and innovation, ecological transition and social inclusion.
The Pnrr constitutes the largest destination of Ngeu funds, equal to 191.5 billion euros, of which almost 50 billion will be destined for the ecological transition.