Welcome back to our Guide and happy 2021! It is a particularly hopeful and expectant year for everyone. For those involved in European projects, it marks the beginning of new programming and is marked by a very big news: Next Generation EU.

We have already discussed NGEU in all our Guide posts devoted to the new programming period. But what is it really and how should it work? We begin the new year with an in-depth study of definite interest. Happy reading!

The definition of NextGenerationEU

To begin with, let us borrow the definition provided by the European Commission:

“NextGenerationEU is a €750 billion temporary recovery facility that will enable the Commission to raise funds on the capital market. This facility will help repair the immediate economic and social damage caused by the coronavirus pandemic, to create a post COVID-19 Europe that is greener, digital, resilient and fit for present and future challenges.”

Up to here everything seems simple, but the variety of terms used by institutions and the media can be a bit confusing:

NGEU represents a turning point in that it will be financed by bonds issued by the European Union. At the initiative of the European Parliament, NGEU also gave new impetus to the extension of the European Union’s “own resources” (funds not dependent on a direct contribution from member states) and the introduction of conditionalities (including respect for the rule of law) for the use of funds.

Evolution and timeline of NextGenerationEU

We have already discussed in our Guide to the Origins of NextGenerationEU, so we will not provide too much detail on the more general aspects(here is a further summary, for those who missed it). But it is useful to recap the road NGEU has traveled and how much more remains to be done to get to the actual use of the funds.

The European Commission and member states have long been working to define the strategic and operational framework for the use of NGEU funds. You can see the Commission’s strategic plan here. The guidelines for the development of the National Recovery and Resilience Plan (abbreviated as NRP) were finalized for Italy in mid-September ( extended and summarized version here) and were approved by Parliament in mid-October;

A draft PNRR (National Recovery and Resilience Plan) has long been available and was published in various Italian media in early December.However, the draft is in a continuous process of revision and is the subject of lively debate among Italian political forces. The most recent draft dates from today. Because the document is constantly evolving, in this analysis we will refer to the more “historical” December draft, incorporating the latest available data. We will also provide an update as soon as an official document is available;

The evolutions of the Plan for Recovery and Resilience are documented in major national newspapers and media outlets, due to the wide-ranging policy debate on this issue. For official updates we recommend referring to the Department for European Policy website, with particular reference to some “tags”-key: Recovery Fund, Recovery Plan, PNRR, NextGenerationEU, National Recovery and Resilience Plan.

Composition of NextGenerationEU

Since terminology can be a bit confusing, the best way to provide clarity on the structure of NGEU is to summarize all its components in a small outline, associating them with their respective financial allocation. The terms in English will be useful for you to consult some excellent infographics developed by the European Council. In order (from most general to most specific) the infographics illustrate: 1 ) the total package of “European funds” available in the seven-year period that has just begun; 2 ) the composition of NextGenerationEU; and 3) the composition and operation of the Recovery and Resilience Facility.

We also try, below, to provide a small summary overview. The figures are in billions of euros.

This composition implies, among other things:

NextGenerationEU in Italy.

We can use the same scheme to provide an estimate of NextGenerationEU funds due to Italy. This is a provisional estimate: values may vary and have some discrepancies between sources. The estimate we offer below is taken from the December 6 draft National Recovery and Resilience Plan circulated in the Italian media.

The figures correspond to those in the current draft and are expressed in millions. In parentheses (in percent) the proportion due to Italy in relation to the total funds made available to the EU.

This composition implies, among other things, a very important benefit for Italy, which will receive almost 30 percent of the total NGEU funds, albeit spread over 27 countries. This gives insight into the importance of this opportunity for our country, which has been repeatedly emphasized by the media and institutions.

Contents (the common framework).

It is not yet possible to define precisely the contents of the National Recovery and Resilience Plan and, consequently, the nature and operation of the funding, projects and actions that will be launched in Italy under NGEU. However, it is possible to provide some anticipations, based on the guidelines provided at the community level (to be followed by all member states).

First, the setting of priorities and the formulation of the various NRPs will have to take into account:

Contents (provisional framework for Italy).

As mentioned above, it is still too early to provide an outline of the contents of the National Recovery and Resilience Plan for Italy. However, we propose below some pointers taken from the December 6 draft NRP as an initial framework for guidance, with comparative data and pointers taken from thecurrent draft. However, the data and figures are provisional and constantly changing.

 

For those interested in delving further (while maintaining a certain level of synthesis), we offer at the end of this post the list of interventions included in the most recent draft of the NRP, for each of its six thematic areas (or missions) and related components. The NRP presents a summary description of each of the interventions.

Governance.

How will NGEU funds, programming and projects be managed in Italy under our National Recovery and Resilience Plan?

This aspect (which the NRP is called upon to define) is particularly controversial and the subject of lively debate among political forces. Effective governance is critical to ensure that funds are used and goals are met in accordance with the defined PNRR timetable and targets. As mentioned earlier, any delays or failure to meet targets may affect the disbursement of funds.

Community-level governance is defined as follows:

The draft Italian NRP provisionally (Dec. 6) provided:

This structure could be significantly modified in the current policy debate.

Keep following us, we will keep you updated!

Indicative list of interventions (draft NRP of January 12)

The NRP presents a summary description and indicative budget allocation for each of these interventions.

DIGITIZATION, INNOVATION, COMPETITIVENESS AND CULTURE [45 .4 mld €]

Digitization, innovation and security in the P.A. [11 .5 mld €]

Digitalization, innovation and competitiveness of the production system [25 .9 mld €]

Tourism and Culture 4.0 [8 .0 mld €]

GREEN REVOLUTION AND ECOLOGICAL TRANSITION [66 .6 mld €]

Green Enterprise and Circular Economy [5 .2 mld €]

Energy transition and sustainable local mobility [17 .5 mld €]

Energy efficiency and building upgrading [29 .0 mld €]

Protection and enhancement of the land and water resource [14 .8 mld €]

INFRASTRUCTURE FOR SUSTAINABLE MOBILITY [32 .0 mld €]

High-speed rail and road maintenance 4.0 [28 .3 mld €]

Intermodality and integrated logistics [3 .7 mld €]

EDUCATION AND RESEARCH [26 .7 mld €]

Skills enhancement and right to study [15 .4 mld €]

From research to enterprise [11 .3 mld €]

INCLUSION AND COHESION [21 .3 mld €]

Employment Policies [6 .7 mld €]

Social infrastructure, families, communities and the third sector [10 .5 mld €]

Special interventions for territorial cohesion [4 .2 mld €]

HEALTH [18 .0 mld €]

Proximity care and telemedicine [7 .5 mld €]

Innovation, research and digitization of health care [10 .5 mld €]