Italy’s recovery and resilience plan

RRF FUNDED PROJECTS IN ITALY

WHAT’S IN THE PLAN?

The reforms and investment in Italy’s plan, approved by Council on 13 July 2021, as amended on 19 September 2023, are helping it become more sustainable, resilient and better prepared for the challenges and opportunities offered by the green and digital transitions.

Following Council approval of Italy’s plan on 13 July 2021, Italy’s recovery and resilience plan was updated on 8 December 2023 also to introduce a REPowerEU chapter.

^{This value includes also the part of the plan which is financed with national resources.}

• 150 investment streams and 66 reforms
• 39% of the plan will support climate objectives 
• 25.6% of the plan will foster the digital transition.

The transformative impact of Italy’s plan is the result of a strong combination of reforms and investment which address the country’s specific challenges. The reforms address bottlenecks to lasting and sustainable growth, while investments are targeted to fostering the digital and green transition as well as addressing social and territorial divides. 

All measures have to be implemented within a tight time frame, as the Regulation establishing the Recovery and Resilience Facility requires all milestones and targets within the national plans to be completed by August 2026.

Italy’s plan now includes five reforms, five “up-scale” investments drawing on existing measures  and12 investments to reduce its reliance on fossil fuels, in line with one of the REPowerEU Plan's objectives.

To finance this increased ambition, Italy’s REPowerEU grants allocation amounts to EUR 2.75 million. In addition, Italy has decided to repurpose EUR 8.4 billion from the plan towards investments that pursue REPowerEU objectives. The total REpowerEU envelope therefore amounts to EUR 11.178 million.

Key measures for REPowerEU

The REPowerEU measures include reforms to streamline permitting for renewable energy deployment, to reduce environmentally harmful subsidies, to facilitate the production of bio-methane, and to step up the provision and uptake of the skills needed for the green transition.

These reforms are complemented by new or scaled-up investments from the original plan to increase the efficiency, reliability and security of the electricity grid, increase the production of hydrogen, address energy poverty, facilitate the recover and recycle of critical raw materials, and strengthen the zero-emission railways and bus fleet. Investments in Italy’s REpowerEU chapter include support for private companies to improve the energy efficiency of their production process.

Together, these measures are expected to increase Italy’s share of renewable energy and accelerate decarbonisation of energy generation,  and transport sectors.

In the area of climate and environmental policies, Italy’s major challenges include the need for the improvement in the management of waste and water resources, significant progress in sustainable mobility and strengthened energy efficiency of buildings.

Key measures for the green transition

• Italy’s recovery and resilience plan supports the green transition with key investments in:
  • energy efficiency in residential and public buildings (€ 16.9 billion).
  • sustainable mobility (€ 34.5 billion).
  • development of renewable energies and the circular economy and improvement in waste and water management (€ 24.7 billion).
• Those investments are accompanied by important reforms aimed at:
  • improving the efficiency in the use and management of water resources and local public services.
  • increasing recycling rate.
  • deploying of charging points for electric vehicles.
  • increasing competition in the electric market.
  • improving the functioning of concessions in Italian ports.
  • simplifying the various legal frameworks for the acceleration of energy efficiency interventions and transport infrastructure projects.

The modified plan, including the REPowerEU chapter, has further strengthened the focus on the plan on the green transition, devoting 39% of the available funds to measures that support climate objectives (up from 37.5% in the original plan).

Digital challenges for Italy include improving the digital skills of the population and workforce, increasing the digitalisation of businesses and fostering the offer of digital public services and accelerating the implementation of key e-government projects.

Key measures for the digital transition

• Italy’s recovery and resilience plan supports the digital transition with investments notably in:
  • connectivity, to foster the widespread deployment of very high capacity networks, including 5G and fibre (€ 5.3 billion).
  • the digital transition and innovation of the Italian production system, through incentives for investments in cutting-edge and 4.0 technologies, RDI and 4.0 training activities (€ 13.4 billion).
  • the digitalisation of the Italian public administration (PA), through a vast array of investments (€ 6.1 billion).
• This is accompanied by a set of reforms aimed notably at:
  • ensuring that ICT solutions can be procured in a more timely and efficient way by the PA.
  • supporting the digital transformation of central and local administrations.
  • removing the obstacles to the adoption of cloud solutions by PAs and streamlining the bureaucracy that slows down the data exchange processes between administrations.

The modified plan has further strengthened the focus on the plan on the digital transition, devoting 25.6% of the available funds to measures that support digital objectives (up from 25.1% in the original plan).

Key macro-economic challenges for the Italian economy include sluggish productivity and economic growth, high structural unemployment and low labour market participation (notably of women and youth) and persisting social and territorial disparities.

Key measures in reinforcing economic and social resilience

• The plan reinforces economic and social resilience with horizontal and sectoral reforms. Horizontal reforms concern in particular:
  • the justice system (to reduce the length of civil and criminal proceedings, improve the efficiency of the justice system and reduce the backlog of pending cases).
  • the public administration (to improve its effectiveness, cutting red tape and modernising public employment).
  • the business environment (to improve public procurement and local public services, reduce late payments and remove barriers to competition).
• Key sectoral reforms include those related to:
  • education and active labour market policies which are complemented by relevant investments to increase the supply of childcare facilities, improve women’s and youth participation in the labour market and reinforce vocational training (€ 26.9 billion)
  • healthcare system, which envisage the use of new technologies to improve hospitals and home healthcare including through enhancing the use of telemedicine while reducing territorial fragmentation (€ 15.7 billion).

• The plan includes measures aimed at promoting the transformation of vulnerable territories into smart and sustainable areas by investing in social housing, strengthening local social services to support children and families, improving the quality of life of persons with disabilities, and investing in infrastructure for the Special Economic Zones in the South of Italy (€ 10.6 billion).

• The plan contains a set of reforms and investments that reinforce economic and social resilience.
• It includes crucial reforms to strengthen the judiciary’s independence, to address some features of the tax system that facilitate aggressive tax planning and to strengthen the institutional framework in order to fight against corruption and money laundering.
• Reforms aim to strengthen early school leaving intervention and prevention measures, expand guidance and opportunities for upskilling and reskilling for all adults, and in particular for the low-skilled, and enhance quality inclusive education for pupils with special needs.
• Reforms and investments aiming at reorganising and strengthening the resilience of the territorial healthcare assistance to better responding to the communities’ needs regarding local care and assistance (including, inter alia, homecare assistance and telemedicine).

More information on the event can be found here

Italy’s plan is consistent with relevant country-specific challenges and priorities identified in the European Semester, the annual cycle of coordination and surveillance of the EU’s economic policies. For a detailed explanation of the European Semester see the following link: The European Semester explained | European Commission (europa.eu).

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