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The clock of the European programs that foresee 750 billion loans (loans and grants) to the EU member states continues to tick time. However, time seems to pass at different speeds for the different “actors”: the European institutions and the beneficiary states.
Here we consider two of the main potential beneficiaries of European funding (grants and loans). And that’s France (100 billion) and Italy (209 billion), the second and third European economies. The first, Germany, makes its own history with just 22 billion European funding. In fact, its intrinsic strength requires few external resources to resume post-pandemic growth and these will be distributed in a system that is already functioning optimally. Here too Chancellor Angela Merkel has demonstrated the vision and strength of a European statesman.
Let us then consider the French model and then compare it with the Italian, which has already been discussed a lot, bearing in mind that by January the plans of the states for the use of the funds must reach the European institutions.
The French plan: clear and executive
On September 3, the Minister of Economy and the President of the Republic presented the 45-page “France Relance” that includes two very clear tables with all the quantitative measures of destination of European funds.
The Plan can be summarized in two parts: resource allocation and implementation methods. The allocation of resources establishes a general principle of ecological transition, is articulated on three pillars consistent with the European criteria of European programs.
The first is theecology strictly speaking, for 30 billion, divided into 9 supply chains, each of which has limited internal sectors. For each supply chain and each sector, the resources derived from European financing are indicated, ranging from small figures such as 50 million for fisheries and aquaculture, to large amounts such as 4.7 billion for the rail system.
The second pillar is competitiveness, for 34 billion, spread over 7 supply chains and various internal sectors, ranging from 20 billion to improve corporate taxation to 250 million to facilitate exports.
The third pillar refers to cohesion, for 36 billion, distributed in 7 supply chains with internal compartments ranging from 50 million for access to vaccines to 7.6 billion for unemployment support.
Implementation methods have two main characteristics. The first is the centrality of the Ministry of Economy, now also called the Ministry of “Relaunch”. The department will be in charge of directing the Plan as well as a series of legislative and operational simplification measures, as well as a series of multilevel control bodies (national, regional and territorial) over the execution of the plan. The second modality is the creation of a single budget chapter called “Relaunching”, active for two years (2021-2022). The rationale for this provision is to separate the funds that will flow from Europe from the annual budget lines in order to accelerate the implementation of investment programs and clearly separate the expenses related to the recovery plan from the relevant expenses for the other Ministries.
The Italian plan: are we in the preliminaries?
The system is very different from the Italian one that was born out of the “States General” organized by the government in June when deliberations on European financing were unknown. Then, in mid-September, the government released the “guidelines for the definition of the National Recovery and Resilience Plan” drawn up by the Interministerial Commission for European Affairs. Finally he has published in the last days the update note of the Def.
However, from these elaborations, which are well done, however, a synthetic sector program and a timetable for the destination of the potential financing do not emerge. Quantitative targets are set for some macroeconomic variables, including GDP growth at least 1.6% per year, public investments at least 3% of GDP, a level of investment in research and development of 2.1% of GDP, an increase in the employment rate of 10 points, to 73%.
These objectives, like others, can be shared, but it is not explained how they relate to European resources that do not appear to be placed in a separate budget, as is the case in France. The Update to Def only indicates the distribution of resources in the years 2021-2026 and between subsidies and loans. It is probable that there is also a “Shadow Plan” for the sectoral distribution of European resources, which certainly cannot be given from the “impression” originated by the Ministries for a total of 557 projects for a total of 677 billion with individual projects ranging from a few million to tens of billions.
Time also passes for Italy
The impression that emerges from the comparison is that in France there is an awareness that time is short, that the European institutions will be very rigorous in providing, in controlling destinations and results. In Italy, on the other hand, there is too much optimism both in the 209,000 million and in the fall in interest rates on our government bonds. To say, for example, that the Mes-European European loan of 37,000 million for the health system with a duration of ten years (and perhaps extendable) is as if we had taken it because of the lowering of interest rates is a mistake. Even more so now that the pandemic begins again. In fact, we can never forget that our public debt over GDP this year is close to 160% and that, despite the fact that 30% is in the hands of European institutions, the financial markets (and the downgrading of the rating) are always on the lookout.
In the pandemic, the Italian Republic and Nation resisted and a fragile government was able to go beyond the many negative internal and external prejudices. Now, however, less partisan interests and more interest would be needed for a co-founding nation of that united Europe that has once again demonstrated its ability to innovate. Therefore, the Italian watch should immediately match the European.
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