Italy’s recovery and resilience plan

Following an unprecedented crisis due to the pandemic, Italy’s recovery and resilience plan responds to the urgent need of fostering a strong recovery and making Italy future ready. The reforms and investments in the plan will help Italy become more sustainable, resilient and better prepared for the challenges and opportunities of the green and digital transitions. To this end, the plan consists of 132 investments and 58 reforms. They will be supported by € 68.9 billion in grants and €122.6 billion in loans; 37.5% of the plan will support climate objectives and 25.1% of the plan will support the digital transition.

The transformative impact of Italy’s plan is expected given a set of ambitious and mutually reinforcing reforms and investments, which address the specific challenges of Italy. 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 reforms and investments have to be implemented within a tight time frame, as the Regulation on the Recovery and Resilience Facility foresees, they have to be completed by August 2026.

The plan will foster economic growth and create jobs. It is expected to lift Italy’s gross domestic product by 1.5% to 2.5% by 2026. This boost to the economy is set to bring up to 240 000 people into jobs. Italy will benefit significantly from the Recovery and Resilience Plans of other Member States, for instance through exports. These spill-over effects account for 0.3 percentage points of gross domestic product in 2026. This demonstrates the added value of joint and coordinated action at the European level.

+ 1.5-2.5% Impact of NextGenerationEU on Italy's gross domestic product by 2026
+ 24,000 Jobs by 2026
0.3% Gross domestic product benefits thanks to other Member States’ recovery and resilience plans in 2026

When designing the plan, Italian authorities consulted national and regional social partners and stakeholders, while pursuing a close dialogue with the Commission ahead of the formal submission of the plan on 30 April 2021. On 22 June 2021, the Commission gave its green light to the plan. On this occasion, President von der Leyen symbolically transmitted the Commission’s assessment to Prime Minister Draghi during a visit in Rome. The plan was in turn adopted by the Council on 13 July opening the door to its implementation and financing.

Recovery and resilience plan for Italy

Green transition

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 (€ 15.3 billion), sustainable mobility (€ 34 billion) and development of renewable energies and the circular economy and improvement in waste and water management (€ 11.2 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 or simplifying the various legal frameworks for the acceleration of energy efficiency interventions and transport infrastructure projects.

Example project: Ecobonus

The plan supports interventions for the improvement of energy efficiency of residential buildings by which beneficiaries may benefit from a tax rebate over the next five years for the amounts spent, provided that the energy savings of those interventions are higher than 30%. By the end of 2025, building renovation interventions will be completed for at least 32 million square meters.

Digital transition

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: (i) connectivity, to foster the widespread deployment of very high capacity networks, including 5G and fibre (€ 6.7 billion), (ii) 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), (iii) 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: (i) ensuring that ICT solutions can be procured in a more timely and efficient way by the PA, (ii) supporting the digital transformation of central and local administrations, (iii) removing the obstacles to the adoption of cloud solutions by PAs and streamlining the bureaucracy that slows down the data exchange processes between administrations.

Example project: Gigabit connectivity to schools and healthcare facilities

The investments in connectivity in the plan are expected to foster Gigabit connectivity across the country and bring 5G connectivity to populated areas, along 2,600 km of 5G corridors and 10,000 Km of extra-urban roads. They also aim at providing school buildings and healthcare facilities with Gigabit connectivity. By mid-2026, it is envisaged that at least additional 9,000 schools and 12,279 healthcare facilities will be provided with 1 Gbps connectivity.

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), and 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 billion) as well as those related to the 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 (€ 15.6 billion). In addition, 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 (€ 13.2 billion).

Example project: Childcare facilities

The investment plan for the 0-6 age group is aimed at increasing the supply of childcare facilities by building, renovating and ensuring the safety of nurseries and preschools, to ensure an increase in the educational offer and the available slots for the 0-6 age group, and thus improving teaching quality. The measure is expected to encourage women’s participation in the labour market and support them in reconciling family and professional life. By the end of 2025, at least 264,480 new places will be created for educational and early childhood care services (from 0 to 6 years old).

The 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)