How did the Commission assess Italy's second payment request?
On 28 June 2022, Italy submitted to the Commission a request for the disbursement of €21 billion, of which €10 billion of grants and €11 billion of loans (net of pre-financing) under the Recovery and Resilience Facility (RRF).
The request was based on the achievement of the 45 milestones and targets for the second instalment, as outlined in the Council Implementing Decision approving the plan.
They cover reforms in the areas of public employment (as part of a broader reform of public administration), public procurement, teaching profession, tax administration and territorial healthcare, as well as investments in key policy areas including ultra-broadband and 5G, research and innovation, tourism and culture, hydrogen, urban regeneration and digitalisation of schools. This payment request also included one target, which concerned an investment that aims to support the reform of the justice system and reduce the backlog of cases. In line with the RRF Regulation, the Commission has up to two months to carry out its preliminary assessment of the request. In the specific case of this payment request, following a joint assessment concerning the relevant timeline, the Italian authorities and the Commission agreed - at the time of the submission of the payment request in June - that a one-month extension was warranted to allow sufficient time for exchanges during the summer period and facilitate the work on both sides.
With their request, the Italian authorities provided detailed and comprehensive evidence demonstrating the fulfilment of the 45 milestones and targets. The Commission has thoroughly assessed this information before endorsing the positive preliminary assessment of the payment request.
What are the next steps?
The Commission has now sent the positive preliminary assessment of Italy's fulfilment of the milestones and targets required for this payment to the Economic and Financial Committee (EFC), asking for its opinion. The EFC's opinion, to be delivered within maximum four weeks, should be taken into account in the Commission's assessment. The Commission will adopt the decision on the disbursement of the financial contribution, in accordance with the examination procedure, through a comitology committee. Following the adoption of this decision by the Commission, the disbursement to Italy would take place. The amounts disbursed to the Member States will be published in the Recovery and Resilience Scoreboard. The Commission has also shared its positive preliminary assessment with the European Parliament.
How do the milestones and targets achieved by Italy so far effectively support the green transition?
The milestones achieved for this second payment request include major reforms such as the national strategies for waste management and the circular economy, which are expected to address existing weaknesses, most notably in some regions of the South. A number of the milestones achieved introduce new legal frameworks to fight against the illegal extraction of water, as well as for the simplification and acceleration of water infrastructure projects and energy efficiency interventions. They are expected to result in a more efficient use of water and energy.
This payment request also includes the award of contracts for the development of renewable energies, as well as incentives to the production and consumption of green hydrogen, which are particularly relevant for the acceleration in the reduction of dependency from fossil fuels.
Finally, some of the milestones achieved for this payment are related to raising awareness about environmental issues and to improving the protection of national parks and marine areas through digitalisation.
How do the milestones and targets achieved by Italy so far effectively contribute to the digital transition?
The milestones achieved for this second payment request include important measures contributing to the digital transition.
The award of all public contracts for faster connection projects that will allow completing the national ultra-fast and 5G telecommunications network throughout the national territory is expected to significantly contribute to the objectives of the digital transition and reduce the digital divide in Italy. It concerns five faster connection projects, namely: (i) “Italia a 1 Giga”, which shall provide 1 Gigabit/s in download and 200 Mbit/s in upload connectivity in grey and black next generation access (NGA) market failure areas; (ii) “Italia 5G”, which shall provide 5G connections in market failure areas; (iii) “Connected schools”, which shall provide school buildings with 1 Gigabit/s broadband connectivity; (iv) “Connected health care facilities”, which shall provide 1 Gigabit/s broadband connectivity to public health care facilities; (v) “Connected smaller islands”, which shall provide ultra-broadband connectivity to selected smaller islands lacking fibre links to the continent.
The digital transition will also be supported through the allocation of the necessary funding to provide support to participants to projects related to Important Projects of Common European Interest (IPCEI).
Further measures supporting the digital transition include: the adoption of a national plan “School 4.0” to transform classrooms into innovative learning environment through the use of digital technologies; the signing of an institutional development contract between regions and the Ministry of Health for the investments on the digitalisation of 280 hospitals and for homecare and telemedicine infrastructure; the issuing of new guidelines for telemedicine; the award of contracts for the creation of national research centres, some of which in key emerging digital technologies.
How do the milestones and targets achieved by Italy so far contribute to improving Italy economic and social situation, and its resilience?
One milestone achieved for this payment lays the ground for the public employment reform, a very wide-ranging reform aimed at improving administrative capacity at central and local levels in terms of human capital (selection, competences, careers and evaluation).
Another achieved milestone enables the public procurement reform through an extensive and encompassing review of the Public Procurement Code. This will further enhance the measures introduced in 2021 and is expected to contribute to productivity growth in the medium and long term as well as to macroeconomic stability, by improving the business environment in Italy.
Some of the achieved milestones for this second payment request foster social inclusion. In particular, Italy adopted an action plan to provide housing solutions for people facing homelessness and deprivation. Italy has also started implementing projects to increase and reorganise public housing, regenerate deprived urban areas and improve degraded public spaces. Measures to fight against illegal settlements of exploited workers in the agricultural sector and to provide them with suitable housing solutions have also been initiated.
Finally, one of the achieved milestones encompassed the adoption of the reorganisation plan by the Ministry of Health together with the Italian Regions. This measure will contribute to improving the provision of primary and territorial healthcare and, along with investment in enhanced homecare, and it will support the overall resilience of the health sector.
Does the achievement of these milestones and targets contribute to an effective implementation of the Plan?
The milestones and targets achieved in this second payment request represent significant steps in the implementation of Italy's recovery and resilience plan and of its broader reform agenda.
In particular, they include important steps to concretely implement reforms launched under the first payment request, and which will be further implemented over the horizon of the plan. These include for example the implementation of the justice reform with the recruitment procedures for courts
In addition, with the achievement of milestones included in this payment request, the roll-out of investments is entering into full swing in several flagship areas such as ultra-broadband and 5G, transport, research and development, health, hydrogen and culture.
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