COMMISSION STAFF WORKING DOCUMENT Analysis of the recovery and resilience plan of Italy Accompanying the document Proposal for a COUNCIL IMPLEMENTING DECISION on the approval of the assessment of the recovery and resilience plan for Italy
Date: 2021-06-22
Institutions: European Commission, Secretariat-General
Subjects: EU aid, EU loan, Italy, coronavirus disease, economic and social cohesion, economic recovery, economic reform, epidemic, investment, structural adjustment

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 22.6.2021  SWD(2021) 165 final  COMMISSION STAFF WORKING DOCUMENT Analysis of the recovery and resilience plan of Italy Accompanying the document Proposal for a COUNCIL IMPLEMENTING DECISION on the approval of the assessment of the recovery and resilience plan for Italy {COM(2021) 344 final}  
 
 
Table of contents 
1. 

Executive summary ............................................................................................................................... 2 

2.  Recovery and resilience challenges: scene-setter ................................................................................ 6 

2.1.  Macroeconomic outlook and developments since the 2020 country report ............................... 6 

2.2 Challenges related to sustainable growth, cohesion, resilience and policies for the next generation

10 

2.3 

Challenges related to the green and digital transition ............................................................... 15 

2.3.1 Green dimension ........................................................................................................................ 15 

2.3.2 Digital dimension ....................................................................................................................... 19 

3.  Objectives, structure and governance of the plan.............................................................................. 27 

3.1.  Overall strategy of the plan ........................................................................................................ 27 

3.2. 

Implementation aspects of the plan ........................................................................................... 31 

4. 

Summary of the assessment of the plan ............................................................................................ 37 

4.1. 

Comprehensive and adequately balanced response to the economic and social situation ...... 37 

4.2. 

Link with country-specific recommendations and the European Semester ............................... 42 

4.3.  Growth potential, job creation, economic, institutional and social resilience, European Pillar of 
Social Rights, mitigating the impact of the crisis, and social territorial cohesion and convergence ...... 50 

4.4. 

The principle of ‘do no significant harm’ .................................................................................... 58 

4.5.  Green transition .......................................................................................................................... 60 

4.6. 

Digital transition .......................................................................................................................... 67 

4.7. 

Lasting impact of the plan ........................................................................................................... 74 

4.8  Milestones, targets, monitoring and implementation ..................................................................... 78 

4.9 

Costing ........................................................................................................................................ 80 

4.10  Controls and audit ....................................................................................................................... 82 

4.11  Coherence ................................................................................................................................... 86 

Annex – Tagging Table ................................................................................................................................ 92 

1 

 
 
 
   
 
 
 
 
 
1.  EXECUTIVE SUMMARY  

Italy’s economy is set to rebound strongly from the sharp and deep recession triggered by 
the COVID-19 pandemic. Italy entered the COVID-19 induced slump with an output level that 
had not yet fully recovered from the post-2009 recession. Real GDP contracted by 8,9% in 2020. 
The  pre-pandemic  improvement  in  labour  market  conditions  came  to  an  abrupt  halt  and  the 
previously observed jobs growth reversed, even if the impact of the economic shock triggered by 
the pandemic was considerably mitigated by rapid national and EU policy action. Poverty, which 
had been declining in 2019, became more widespread. The regional divide was widening already 
before the COVID-19 crisis, which further exacerbated risks to territorial cohesion. Italy's public 
finances have been severely hit by the pandemic.  The government debt-to-GDP ratio increased 
from 134,6% in 2019 to 155,8% in 2020 and is expected to increase further in 2021 to 159,8%, 
before  declining  to  156,6%  in  2022.  Looking  ahead,  falling  infection  rates  associated  with  an 
accelerating vaccination campaign that allow for a marked easing of restrictions, are paving the 
way  for  a  strong  rebound  over  the  rest  of  2021.  Sizeable  domestic  policy  support  and  of  Next 
Generation EU-financed investment  should help real  GDP to  grow by 4,2% in  2021 and reach 
4,4%  in  2022,  when  the  investment  and  reform  programme  set  out  in  Italy’s  Recovery  and 
Resilience Plan will start to take full effect. 

Italy  has  requested  the  maximum  amount  available  under  the  Recovery  and  Resilience 
Facility,  corresponding to EUR 191,5 billion, of which EUR 68,9 billion in non-repayable 
financial  support  and  EUR  122,6  billion  in  loans.  The  plan  is  broad-based  and  aims  at 
addressing Italy’s main structural challenges, which relate to weaknesses in productivity growth, 
business environment, the public administration, the justice system and insolvency proceedings 
as well as in the regional differences, the labour market, and in educational outcomes. The Plan 
also  addresses  important  investment  needs  for  the  twin  green-digital  transitions,  research  and 
innovation,  to  improve access  to  essential care in  a more resilient healthcare system, including 
the  need  to  fill  the  infrastructural  gap  between  regions.  It  also  outlines  initiatives  for  long-
standing challenges related to the high level of undeclared work and tax evasion.  

The  Plan  includes  16  components  and  is  structured  around  6  areas  of  intervention 
(“Missions”),  focusing  on  three  horizontal  priorities:  digitalisation  and  innovation, 
ecological  transition  and  social  inclusion.  It  includes  measures  in  digitalisation,  innovation, 
culture  and  tourism;  circular  economy  and  waste  management;  energy,  including  renewable, 
energy  efficiency,  energy  infrastructures,  hydrogen;  mobility;  energy  efficiency  in  buildings; 
sustainable  use  and  protection  of  land  and  water  resources;  rail  networks  and  intermodality; 
education,  research  and  innovation;  policies  for  employment,  social  and  territorial  cohesion; 
better territorial integration of care and facilitating the uptake of innovation in healthcare, as well 
as  a  set  of  horizontal  and  enabling  reforms  related  to  the  public  administration,  the  justice 
system,  the  business  environment  (including  on  local  public  services,  concessions,  market 
surveillance,  late  payments  and  public  procurement),  tax  administration  and  public  financial 

2 

 
 
 
 
management. These measures aim at enhancing productivity, competitiveness, sustainability and 
resilience  of  the  economy,  while  creating  new  jobs  and  fostering  economic  growth,  reducing 
territorial, social, gender and generational divides and minimising the environmental footprint of 
production.  By  addressing  the  country  specific  recommendations  issued  to  Italy,  the  measures 
included  in  the  Plan  appear  also  consistent  with  the  challenges  and  priorities  identified  in  the 
Draft Council Recommendation on economic policy of the euro area.1    

The Plan is balanced in its response to the six policy pillars  referred to in Article 3 of the 
RRF  Regulation.2  Several  measures  of  the  Plan  contribute  to  the  pillar  on  green  transition, 
notably the components on circular economy and sustainable agriculture; on renewable energy, 
hydrogen, grid  and sustainable mobility;  on energy efficiency and renovations of buildings;  on 
protection  of  land  and  water  resources;  and  on  the  rail  network.  The  pillar  on  the  digital 
transformation  is  addressed  through  measures  distributed  across  the  plan  and,  in  particular,  by 
the components on the digitalisation of the public administration and the productive system, as 
well as by several measures on the digitalisation of the education and health systems. The plan 
covers  the  pillar  on  smart,  sustainable  and  inclusive  growth  with  the  dedicated  chapter  of 
horizontal and enabling reforms, particularly concerning the public administration and business 
environment,  and  with  the  component  on  research  and  innovation.  The  pillar  on  social  and 
territorial  cohesion  is  addressed  with  the  dedicated  components  on  employment  policies, 
territorial  cohesion  and  social  infrastructure.  Territorial  cohesion  is  also  addressed  by  tangible 
and  intangible  investments  across  the  Plan.  The  components  on  the  health  sector,  its 
digitalisation  and  medical  research,    complemented  by  the  reforms  of  the  justice  system  and 
public  administration,  cover  the  pillar  on  health,  economic  and  institutional  resilience.  Finally, 
the pillar on the next generation, children and youth is addressed by the component dedicated to 
education as well as by the component on employment policies, particularly by the measures on 
skills and employability.    

With  its  focus  on  growth-enhancing  reforms  and  investments,  the  Plan  is  set  to  improve 
Italy’s  growth  potential,  labour  market  conditions  and  social  resilience.  Investments  in 
digitalisation  and  the  green  transition  as  well  as  education  and  research,  coupled  with  reforms 
improving  the  overall  business  environment,  such  as  the  reform  of  public  administration,  the 
justice  system  and  of  the  insolvency  proceedings,  are  set  to  spur  productivity  growth  in  the 
medium and long term. In addition, targeted labour market reforms and investments to improve 

1  Pending  final  adoption  by  the  Council,  after  endorsement  by  the  European  Council.  The  text  agreed  by  the 
Eurogroup  on  16  December  2020  is  available  at: https://data.consilium.europa.eu/doc/document/ST-14356-2020-
INIT/en/pdf. 
2  Regulation (EU)  2021/241 of  the  European  Parliament  and  of  the  Council  of  12  February  2021  establishing  the 
Recovery and Resilience Facility.  

3 

 
 
 
 
                                                 
 
the  employment  prospects,  in  particular  of  young  people  and  women,  are  likely  to  lift  labour 
supply  and  provide  equal  access  to  skills,  thus  support  potential  growth.  The  measures  to 
strengthen and integrate the provision of social services, provide affordable housing and support 
urban  regeneration,  are  expected  to  help  bridge  the  gaps  between  geographic  areas  and  social 
groups. A better functioning of the labour market accompanied by other measures such as, inter 
alia,  integrated  social  services,  and  measures  supporting  the  healthcare  system  should  increase 
the economic resilience and social and territorial cohesion, and contribute to the European Pillar 
of Social Rights.  

The  Plan  is  not  expected  to  do  significant  harm  to  environmental  objectives.  This  is 
expected to be achieved by selecting or designing the measures in the plan in line with the do-no-
significant-harm  (DNSH)  principle,  and  by  substantiating  DNSH  compliance  as  part  of  the 
DNSH assessment. Investments in last-mile road connections are compensated by investments in 
electric  charging  stations.  Additional  guarantees  have  been  provided  for  vehicles  running  on 
biomethane and for hydrogen. Investments in water irrigation provide guarantees that they will 
not  deteriorate  the  status  of  existing  water  bodies  and  will  contribute  to  improving  it. 
Investments in renovations contains guarantees that demolition waste will be treated according to 
circular economy principles. Individual project authorisation shall respect EU and national rules 
and guidelines for impact assessments. 

The measures included in the Plan related to the green transition account for 37,5% of the 
total  allocation.  The  measures  included  in  the  Plan  appear  also  consistent  with  the  2020 
Commission country specific guidelines on the implementation of the Italian national energy and 
climate plan.3 The plan includes a number of measures related to energy efficiency, in particular 
a  scheme  for  house  renovations.  It  also  envisages  direct  investments  to  improve  the  energy 
efficiency of buildings.  Italy also intends to use the Facility to boost the production and use of 
clean  hydrogen  in  line  with  the  flagship  projects  Power  Up  and  Refuel  and  Recharge  and  to 
increase the share of renewables in transport and heating, in particular through the development 
of bio-methane. The Plan also focuses on reducing greenhouse gas emissions from transport, it 
envisages  important  investments    to  boost  sustainable  urban  mobility,  including  e-mobility,  as 
well as railway infrastructure to support modal shift, and to reduce greenhouse gas emissions in 
air  and  maritime  transport  and  in  agriculture.  In  addition,  reforms  are  included  to  support  the 
green  transition,  for  instance  by  facilitating  the  authorisation  of  renewable  power  production. 
The  Plan  also  supports  Italy’s  climate  adaptation  efforts,  as  well  as  seismic  resilience  and  the 
quality of infrastructures, and it addresses the existing challenges on circular economy and waste 
management, water supply and wastewater management and biodiversity protection. 

3 SWD(2020) 911 final 

4 

 
 
 
 
                                                 
The Plan is expected to contribute to Italy’s digital transformation through a wide range of 
measures  amounting  to  25,1% of the total  allocation. These measures aim,  in  particular, at  (i) 
improving  connectivity,  by  accelerating  the  deployment  of  very-high-capacity  networks,  in 
particular  5G  and  fibre  networks;  (ii)  fostering  the  digital  transformation  of  the  public 
administration,  the  justice,  health  and  education  systems  as  well  as  culture  and  tourism;  (iii) 
supporting  the  digitalisation  of  Italian  businesses  with  a  particular  focus  on  industry  4.0 
technologies;  (iv)  strengthening  human  capital  by  improving  the  general  population’s  basic 
digital skills and by boosting upskilling and reskilling;; and (v) supporting, although to a more 
limited extent, the development and deployment of advanced digital technologies.  

The  Plan  also  includes  a  set  of  reforms,  notably  to  improve  the  effectiveness  of  public 
administration  and  foster  the  business  environment.  More  specifically,  the  Plan  includes  a 
comprehensive  reform  of  public  employment,  and  measures  aiming  at  reducing    red  tape  and 
strengthening  administrative  capacity,  especially  at  local  level.  In  addition,  the  reform  of  the 
justice system4 aims at strengthening its resilience, reducing the backlog and the length of both 
civil and criminal proceedings, with expected positive impact on the economic system. The Plan 
also  includes  measures  to  improve  regulations  in  specific  sectors  and  to  remove  a  number  of 
barriers to competition, including a simplification of the public procurement framework and the 
prioritization of competitive processes to award local public service contracts. Finally, the Plan 
includes,  among  others,  measures  to  improve  tax  compliance,  administration  efficiency  and  to 
step up the fight against tax evasion and undeclared work.  

The  Plan  has  the  potential  to  bring  enduring  structural  changes  and  therefore  to  have  a 
lasting  impact  on  the  Italian  economy  and  society.  To  this  end,  the  effective  and  swift 
implementation  will  be  crucial.    A  wide  range  of  reforms  in  key  policy  areas  are  expected  to 
address  long-standing  barriers  to  economic  growth.  In  particular,  the  Plan  contains  reforms 
aimed at bringing structural changes to the functioning of the public administration and justice 
system and at improving the overall business environment. Planned reforms and investments in 
the  education,  skills  development,  and  research  and  innovation  have  the  potential  to  enhance 
human capital and research capacities in the long run. In particular, the Plan include a reform of 
the teaching profession, focusing particularly on recruitment, selection, mobility and training of 
teachers.  Reforms  in  sectors  like  transport  and  water  management  are  expected  to  structurally 
improve  economic  efficiency,  inter  alia,  through  a  more  systematic  use  of  competitive 
procedures to assign the services contracts.  

4 See the forthcoming Rule of Law Report, Country Chapter on the rule of law situation in Italy 

5 

 
 
 
 
 
 
                                                 
The estimated total costs of the Plan are reasonable, plausible, in line with the principle of 
cost-efficiency  and  commensurate  to  its  expected  economic  and  social  impact.  Italy  has 
submitted  information  about  the  cost  estimates  for  all  measures.  The  volume  and  quality  of 
information  about  the  cost  estimates  vary  across  measures.  All  measures  financed  by  the 
recovery  and  resilience  plan  for  Italy  refer  to  costs  undertaken  after  1  February  2020.  The 
measures  entail  non-recurrent  costs,  except  for  duly  justified  exceptions. The  cost  estimates  of 
the  Plan  provide  an  acceptable  level  of  assurance  about  the  risk  of  double  financing.  Italy  has 
committed to  set  a clear demarcation and to  ensure complementarity between the Plan and the 
other European Structural and Investment Funds (ESI) for the period 2021-2027.  
Italy  has  created  a  multi-level  governance  system  to  ensure  an  effective  implementation 
and  monitoring  of  the  Plan  and  established  a  robust  control  system.  The  arrangements 
related  to  the  governance,  which  have  been  enshrined  in  a  legal  act  (Decree  Law  of  31  May 
2021, n. 77), clearly identify the bodies responsible for the monitoring and implementation of the 
Plan  and  define  their  competences  and  duties.  Relevant  actions  to  strengthen  administrative 
capacity,  including  at  local  level,  and  to  simplify  administrative  procedures  are  envisaged  to 
ensure an effective implementation and monitoring of the plan, and have also been enshrined in 
two  legal  acts  (Decree  Law  of  9  June  2021,  n.  80,  and  Decree  Law  of  31  May  2021,  n.  77, 
respectively).  The  monitoring  and  reporting  mechanisms  are  well  defined  and  in  line  with  the 
intended purposes. The Plan established an independent Audit Body, as well as an audit strategy, 
and a robust control system. The set of milestones and targets of the Italian Plan  appears to be 
clear,  realistic  and  with  a  good  degree  of  ambition  and  associated  to  relevant,  acceptable  and 
sufficiently  robust  indicators.  Thus,  the  set  of  milestones  and  targets  is  considered  appropriate 
for monitoring the implementation of the Plan.  

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

Balan
ced 
Respo
nse 
A 

CSRs 

A 

Grow
th, 
jobs
… 
A 

DNS
H 

A 

Gree
n 
targe
t 
A 

Digit
al 
targe
t 
A 

Lasti
ng 
impa
ct 
A 

(8) 
 M & 
T 

Costi
ng 

A 

B 

Cont
rol 
Syste
ms 
A 

Coheren
ce 

A 

(9) 

(10) 

(11) 

2.  RECOVERY AND RESILIENCE CHALLENGES: SCENE-SETTER 

2.1. Macroeconomic outlook and developments since the 2020 country report  

An accelerating vaccination campaign and the continuing gradual easing of restrictions are 
paving the way for a strong rebound in the second half of 2021. The COVID-19 outbreak and 
the associated confinement measures to manage the pandemic pushed the Italian economy into a 
sharp and deep recession.   Real  GDP dropped by 8,9% in 2020 but  is projected to  rebound by 

6 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,2%  this  year  on  the  back  of  sizeable  domestic  policy  support  and  the  first  stage  of  Next 
Generation EU-financed investment.  In 2022, the investment  and reform programme set  out  in 
Italy’s Recovery and Resilience Plan will take full effect and should help propel output growth to 
4,4%. The projected recovery should allow the economy to  return to its pre-pandemic level by 
the last quarter of 2022. Domestic demand should help the economy bounce back, while exports 
continue to benefit from strong momentum due to an improving external outlook. HICP inflation 
averaged -0,1% in 2020 and base effects related to rising oil prices are set to push HICP inflation 
above 1% this year, before it moderates to about 1% in 2022. 
The improvement in labour market conditions came to an abrupt halt with the onset of the 
COVID-19 crisis. Total employment shrunk by 2,8% in 2020. However, the unemployment rate 
dropped below the level of 2019 (9,2% vs 10,0% in 2019). Many employees were supported by 
policy  measures,  notably  short-time  work  schemes,  while  a  sizeable  share  of  job  seekers  and 
newly unemployed exited the labour market at the peak of the pandemic. By contrast, the jobless 
rate  of  young  people  (15-24  years),  who  were  often  employed  in  contact-intensive  services  on 
short-term contracts and were thus particularly affected by the crisis stood at 29,5% in 2020 (vs. 
29,2% in 2019), among the highest in the EU. 

Poverty declined in 2019 but is likely to have worsened in 2020 because of the COVID-19 
pandemic. The share of the population at risk of poverty or social exclusion fell from 27,3% in 
2018 to 25,6% in 2019 (EU27: from 21,6% to 20,9%). According to ISTAT data, the percentage 
of households in absolute poverty increased in 2020 (7,7% in 2020 vs 6,4% in 2019). However, 
the  social  situation  differs  substantially  among  age  groups,  gender  and  nationality.  Given  that 
social spending continues to be concentrated on pensions, the poverty risk for the elderly (65+) is 
sizeably  lower  than  for  the  average  of  the  total  population.  By  contrast,  the  young  are 
disproportionally affected by poverty as a direct consequence of the high youth unemployment 
rate.  Women  run  a  somewhat  higher  poverty  risk  than  men  (26,6%  vs.  24,5%).  Non-Italian 
citizens  face  a  much  higher  risk  of  poverty  or  exclusion  than  Italians  (38,6%  vs  24%).  In 
addition, Roma Sinti and Caminanti face a high risk of social exclusion5. The pandemic, which 
disproportionally affects the job prospects of women and the young, is likely to have exacerbated 
these divergences. 

The macroeconomic scenario that underpins Italy’s Recovery and Resilience Plan projects 
a  sizeable  rebound  of  economic  growth  in  2021  and  2022.  Real  GDP  is  set  to  increase  by 
4,5%, according to the Stability Programme and output growth is  expected to remain  strong in 
2022  at  4,8%  before  moderating  over  the  following  years.  The  underlying  assumptions  of  the 
authorities’ macroeconomic projections are considered to be plausible. The Commission projects 

5 https://ec.europa.eu/info/policies/justice-and-fundamental-rights/combatting-discrimination/roma-eu/roma-
inclusion-eu-country/roma-inclusion-italy_en 

7 

 
 
 
 
                                                 
a macroeconomic scenario for 2021 and 2022 that is slightly more cautious than the one of the 
Italian  government.  As  regards  domestic  demand,  the  Commission  forecasts  a  more  moderate 
rebound in private consumption, but a more dynamic growth in investment. The macroeconomic 
and  fiscal  outlook  continues  to  be  affected  by  high  uncertainty  related  to  the  COVID-19 
pandemic and its economic consequences. 

Italy's public finances have been severely hit by the COVID-19 crisis. Following a historical 
low in 2019 (1,6% of GDP), the government headline deficit increased sharply to 9,5% of GDP 
in 2020, due to the decline in revenues caused by the economic crisis and the cost of the policy 
response. The high borrowing requirements and the fall in GDP caused a strong increase of the 
government debt-to-GDP ratio, which rose from 134,6% in 2019 to 155,8% in 2020. In 2021, the 
government  deficit is  expected to  increase further to  11,7% of  GDP based on the Commission 
2021 spring forecast, as the cost of the additional policy response is expected to more than offset 
the increase in revenues related to the projected recovery. The government debt ratio is projected 
to  continue  increasing  to  159,8%  of  GDP  in  2021,  also  considering  the  effect  of  government 
capital support to firms, which has an impact on government gross debt but not on the headline 
deficit.  

Italy is deemed to face high fiscal sustainability risks in the short and medium term6. Short-
term risks stem from the sharp deterioration of public finances in 2020 and the resulting surge in 
financing  needs  to  33%  of  GDP.  Government  financing  needs  are  expected  to  remain  sizeable 
from 2021 onwards, although on a declining trend. High risks in the medium term reflect the fact 
that,  under  the  baseline  assumptions,  the  government  debt-to-GDP  ratio  would  remain  above 
155%  for  most  of  the  2020s,  increasing  again  to  158,8%  in  2024  and  declining  to  153,4%  by 
2030. Alternative scenarios, both favourable and unfavourable, confirm these risks. At the same 
time, the implementation of reforms and investments under the Next Generation EU, notably the 
Recovery and Resilience Facility, is expected to have a substantial positive and persistent impact 
on GDP growth in the coming years, which, ceteris paribus, should contribute to strengthen debt 
sustainability.  Ageing  costs  are  projected  to  increase  substantially  in  the  medium  term  and 
decline in the long term in the baseline scenario. This contributes to reduce the fiscal adjustment 
needed  to  stabilise  the  debt  ratio  in  the  long  term.  A  more  comprehensive  debt  sustainability 
analysis taking into account also the high level of government debt points to high risks, resulting 
in an overall classification of medium fiscal sustainability risks in the long term. 

High-quality investment projects and reforms are crucial to increase the growth potential 
and  reduce  the  government  debt  ratio.  The  additional  investments  included  in  the  plan  are 

6 See Article 126(3) report (June 2021) and also the Debt Sustainability Monitor 2020 for detailed methodological 
aspects. 

8 

 
 
 
 
 
                                                 
expected to significantly increase GDP, i.e. the denominator of the debt ratio. At the same time, 
the  second-round  revenue  effects  from  the  additional  growth  are  expected  to  substantially 
contribute  to  increasing  the  primary  balance.  Finally,  Recovery  and  Resilience  Facility  loans 
included in the plan imply potential savings on interest expenditure. Although no specific figures 
are  reported  on  the  debt  trajectory,  the  plan  highlights  the  importance  of  implementing 
investment projects with high growth potential in order to reduce the government debt ratio.  

Italy continues to experience excessive macroeconomic imbalances, which are not expected 
to  improve  in  the  near  term,  while  it  is  not  yet  possible  to  assess  the  full  impact  of  the 
COVID-19 crisis. Following the publication of the 2021 Alert Mechanism Report in November 
2020,  an  in-depth  review  was  carried-out  for  Italy.  Based  on  its  findings,  the  Commission 
concluded that Italy is experiencing excessive macroeconomic imbalances. Vulnerabilities relate 
to  high  government  debt  and  protracted  weak  productivity  dynamics,  which  have  cross-border 
relevance in a context of labour market and banking sector fragilities. As mentioned above, the 
government  debt  ratio  increased  sharply  in  2020  and  is  expected  to  edge  down  only  in  2022. 
Labour productivity increased in 2020 but long-term productivity growth remains constrained by 
barriers to private and public investment and by limits to growth of the most productive firms. 
Activity  and  employment  rates  remain  below  the  EU  average.  The  very  sluggish  productivity 
growth, together with low employment rates, hamper potential growth, which in turn limits the 
room for debt deleveraging. While the Italian banking sector became more robust and resilient in 
the  pre-COVID-19  crisis  years,  challenges  remain.  Notably,  non-performing  loans  declined  in 
recent years but are still relatively high and risk increasing once temporary support measures are 
phased out.  

The  regional  divide  was  widening  before  the  COVID-19  crisis  and  risks persisting  in  the 
recovery phase. The ratio of GDP per capita between the South and the Centre-North remains 
lower than in 2008. This has occurred in the context of an overall loss in relative performance of 
most Italian regions compared to the EU average. Although GDP per capita decreased in most 
Italian regions, including in the North (for instance, in Lombardy in 2018 it dropped form 158% 
of the EU average to 126%), the drop in Southern regions is more worrisome as GDP per capita 
was already well below the EU average (for instance in Sicily it dropped from 77% of the EU 
average  to  58%) (Svimez,  2020). Although  the  COVID-19  outbreak  and  the  impact  of  the 
lockdown  was  concentrated  in  the  North, especially  in  the  first  phase, the  contraction  of 
economic activity in 2020 is estimated to have been only slightly higher than in the South (-9,8% 
versus 9,0%, respectively). However, the recovery in 2021 and 2022 is expected to be higher in 
the  Centre-North  (+4,5%  and  +5,3%  versus  +1,2%  and  +1,4%).  On  the  other  hand,  exports 
recorded a larger proportional drop in the South (-15,6% versus -12,2%), although they remain 
less important than in the North.5  

Table 1: Comparison of macroeconomic developments and forecasts 
2023 

2019 

2022 

2020 

2021 

2024 

2025 

2026 

9 

 
 
 
 
 
 
COM  COM 
0,3 

-8,9 

RRP 
-8,9* 

COM 
4,2 

RRP 
4,5* 

COM 
4,4 

9,9 

2,2 

9,2 

5,4 

0,1 

0,6 

-0,1 

10,2 

9,3* 

10,0 

9,6* 

4,9* 

-10,3 

-10,3* 

Real  GDP  (% 
change) 
Employment 
(% change) 
Unemployment 
rate (%) 
HICP  inflation 
(% change) 
General 
Government 
balance  (%  of 
GDP) 
Gross 
ration 
GDP) 
Source: Commission Spring Forecast 2021 (COM); * Stability Programme. 

debt 
(%  of 

155,8*  159,8 

-11,8* 

134,6 

155,8 

-11,7 

-0,1* 

-9,5* 

1,0* 

-1,6 

-9,5 

-5,8 

1,3 

1,1 

159,8*  156,6 

RRP 
4,8* 

2,6* 

1,8* 

n/a 

n/a 

4,7* 

2,3* 

1,6* 

n/a 

n/a 

9,2* 

8,5* 

8,0* 

n/a 

n/a 

1,3* 

1,4* 

1,4* 

n/a 

n/a 

-5,9* 

-4,3* 

-3,4* 

n/a 

n/a 

156,3*  155,0*  152,7*  n/a 

n/a 

2.2 Challenges related to sustainable growth, cohesion, resilience and policies for the next 

generation  

Italy  entered  the  pandemic  with  socio-economic  vulnerabilities,  which  could  further 
aggravate once emergency measures are phased out. Productivity and economic growth were 
sluggish,  constraining the reduction of the high  government  debt-to-GDP ratio. High  structural 
unemployment and low labour market participation, notably of women and youth, also contribute 
to constrain growth potential, while social and territorial disparities persist. The financial sector 
remains subject to some vulnerabilities and inefficiencies.  

Productivity  growth  has  stagnated  in  the  last  two  decades,  notably  due  to  a  negative 
contribution  of  the  service  sector,  small  firms  and  some  Southern  regions.  While  labour 
productivity  in  manufacturing  increased  (although  less  than  in  peer  countries),  the  rising 
importance of the service sector was accompanied by poor productivity performance. Moreover, 
productivity  growth  was  concentrated  among  bigger  exporting  firms,  while  the  large  share  of 
small enterprises hampers higher productivity levels and growth.7 

Weak productivity growth is also linked to low private and public investment.  Investment 
did not fully catch up yet with the levels preceding the previous crisis and remains below peer 
countries. Public investment declined mainly at the local level over the last years and particularly 

7 Bauer, P., Fedotenkov, I., Genty, A., Hallak, I., Harasztosi, P., Martinez Turegano, D., Nguyen, D., Preziosi, N., 
Rincon-Aznar,  A.  and  Sanchez  Martinez,  M.,  Productivity  in  Europe:  Trends  and  drivers  in  a  service-based 
economy, JRC, 2020.  

10 

 
 
 
 
 
 
 
 
 
 
                                                 
in Southern regions. Moreover, the composition of investment is skewed towards manufacturing, 
while  remaining  relatively  limited  for  professional  services  and  innovation,  especially  in  the 
South. Italy is among the lagging countries in terms of intangible investment  among EU peers. 
Furthermore, the largest gap to its peers is in R&D intensity. This discrepancy can be explained 
by  the  structure  of  the  economy,  namely  by  the  considerable  weight  of  sectors  with  low 
intangible  intensities  such  as  tourism.  Additionally,  the  discontinuity  of  policies  to  support 
knowledge transfer and innovation ecosystems has so far hampered the innovation performance. 

The  very  high  level  of  government  debt  and  the  composition  of  public  spending  have 
constrained  public  investment  and  hampered  growth-enhancing  spending.  Government 
spending  remains  concentrated  towards  old-age  pensions,  while  expenditure  for  R&D  and 
tertiary  education  remains  low.  Public  investment  remains  below  pre-crisis  levels  creating  an 
infrastructural  gap.  The  fiscal  framework  is  complex,  and  responsibilities  over  revenue  and 
expenditure  across  levels  of  government  remain  asymmetrical,  creating  problems  of  incentives 
and  monitoring.  The  high  level  of  public  debt  requires  a  particularly  prudent  and  effective 
management  of  public  finances,  both  on  the  expenditure  and  on  the  revenue  side,  also  with  a 
view to improve their composition. 

A  number  of  structural  barriers  hold  back  investment  and  productivity  growth.  The 
business  environment  is  not  sufficiently  supportive  while  inefficiencies  in  the  public  sector, 
particularly  concerning  the  weak  administrative  capacity,  persist.  There  is  ample  margin  to 
improve  the  innovation  performance  and  digitisation  of  the  productive  system.  Weak  human 
capital, especially concerning techno-scientific fields and at management level, as well as skills 
mismatches  remain.  The  high  tax  wedge  and  the  uncertainty  of  the  policy  framework  also 
contribute  to  holding  back  investment.  The  allocation  of  capital  is  not  fully  efficient, 
constraining  access  to  finance  notably  for  start-ups  and  small  firms,  whose  use  of  non-bank 
financing  remains  limited.  A  transformative  and  forward-looking  research,  innovation  and 
diffusion policy is crucial to strengthen Italy’s productivity growth and competitiveness.  

The  business  environment  needs  to  become  more  growth-supportive.  The  incomplete 
implementation,  uncertainty  and  the  complexity  of  the  public  procurement  and  concessions 
framework undermines the ability of administrations to use tenders efficiently, especially at local 
level,  and  weighs  on  planning  decisions  of  private  firms,  especially  SMEs.  Late  payments  by 
public administrations, including at local level, and long tendering procedures8 also discourage 
businesses  to  participate  in  public  tenders  (some  30%  of  tenders  only  receive  one  bid).  The 
framework  for  local  public  services  (e.g.,  transport,  utilities)  does  not  always  guarantee  that 
competitive  tenders  are  prioritised  over  direct  awarding  or  in-house  solutions,  resulting  in 
length,  complexity  and 
inefficiencies  of 

the  services  management.  Furthermore, 

the 

8 Public tendering procedure last 200 days in Italy compared to some 120 days on average in the rest of the EU. 

11 

 
 
 
 
 
                                                 
unpredictability  of  administrative  procedures,  remaining  restrictions  to  competition  and  some 
sectoral  overregulation  weigh  on  firms’  productivity  and  competitiveness,  discouraging 
investments. This is particularly pronounced for business services, regulated professions, retail, 
collaborative  economy,  energy  and limited authorisations (“concessions”) for the use of public 
goods.  

Italy’s  public  administration  remains  subject  to  structural  weaknesses  in  terms  of 
efficiency  and  effectiveness.  The  Italian  public  sector  workforce  is  one  of  the  oldest  and  less 
skilled  in  EU,  with  about  half  of  the  staff  set  to  retire  in  the  next  15  years.  Administrative 
capacity  remains  weak,  especially  at  local  level,  and  the  level  of  digitisation  is  low,  both 
concerning  internal  procedures  and  the  provision  of  public  services.  Better  strategic  planning 
capacity,  monitoring  and  evaluation  mechanisms,  and  use  of  evidence-based  policymaking 
instruments  would  further  enhance  the  quality  of  public  policies.  Italy’s  public  administration 
has been subject to numerous reforms, whose implementation was however often incomplete and 
ineffective. 

Inefficiencies in the justice system continue to weigh on the business environment. Despite 
recent improvements, the estimated time needed to resolve civil and commercial litigious cases 
remain  among  the  highest  in  the  EU,  with  ample  room  for  more  efficient  management  and 
limiting unfounded appeals. According to the 2020 EU Justice Scoreboard, the disposition time, 
which provides an estimate of the duration of the proceedings, in Italy is equal to 2 655 days for 
civil and commercial litigious cases considering all instances (against a EU median of 549 days) 
and 1 367 days for criminal cases considering all instances (against a EU median of 340 days); as 
to  administrative  cases,  the  disposition  time  is  equal  to  1  679  days  considering  all  instances 
(against a EU median of 469 days) The anti-corruption framework could be further strengthened, 
especially  considering  that  the  low  efficiency  of  criminal  justice  at  appeals  level  continues 
hampering  an  effective  fight  against  corruption.  Insolvency  proceedings 
in  Italy  are 
comparatively lengthy and costly. The entry into force of a reformed insolvency framework has 
been postponed to September 2021. 

Low education outcomes, not sufficient acquisition of skills and regional gap in educational 
attainment level remain a major growth impediment. Basic skills proficiency is below the EU 
average,  with  marked  differences  between  regions  and  types  of  school.  Skills  and  educational 
attainments show a clear North-South gap.9 Early school leaving is high, particularly for non-EU 
born  pupils.  Inadequate  digital  equipment  and  infrastructure  and  limited  digital  training  for 
teachers  and  students  hamper  innovation  in  education,  especially  in  rural  areas.  Tertiary 

9 Hippe, R., Jakubowski, M. and De Sousa Lobo Borges De Araujo, L., Regional inequalities in PISA: the case of 
Italy and Spain, , 2018,  JRC109057.   

12 

 
 
 
 
 
                                                 
educational  attainment  is  low,  and  the  non-academic  tertiary  sector  is  underdeveloped. 
Increasing  the  attractiveness  of  higher  education,  including  in  science  and  technology  (STEM) 
disciplines,  particularly  for  women,  could  help  reduce  skills  mismatches  and  increase 
employment.  Limited access  to  managerial  and technical  skills  is  also  a major issue for  Italian 
SMEs. More affordable quality early childhood education and care and longer school time could 
help  improve learning outcomes as  well as  women’s labour market  participation.  Low rates of 
lifelong learning both in the private and the public sector make it hard to adapt workers’ skills to 
labour market evolutions, including the green and digital transitions. 

Italy’s tax system suffers from long-lasting weaknesses in terms of efficiency and growth-
friendliness, further exacerbated by tax evasion. The tax wedge on labour remains among the 
highest in the EU, while other sources of revenue less detrimental to growth are underused. The 
high level of tax evasion erodes government revenues and increases the administrative burden on 
compliant firms and citizens, worsening the distortionary impact of the tax system. As concerns 
other  sources  of  revenues,  the  use  of  public  concessions  for  public  goods  is  suboptimal, 
generating a significant loss of revenues. The property tax base is outdated, eroding government 
revenues  and  hampering  proportionality.  There  are  numerous  tax  expenditures,  which  in  some 
cases provide weak incentives to energy efficiency, discourage work by second earners or imply 
very  high  marginal  tax  rates.  The  high  complexity  and  the  frequent  changes  of  the  tax  regime 
increase compliance costs, resulting in a high number of tax litigations and further complexity of 
the  business  environment.  Although  revenues  from  environmental  taxes  are  above  the  EU 
average, their current incentive structure does not promote transitioning to cleaner technologies. 
Public investments in clean energy technologies have remained at same level during 2010-2018 
period,  while  private  investments  in  the  same  area  have  dropped  nearly  50%  from  2010  to 
2016.10 

Pockets of vulnerability  remain in the banking sector, while firms’ limited access  to non-
bank finance leaves  them vulnerable to shocks to the banking sector. The resilience of the 
Italian  banking  sector  has  improved  compared  to  the  double-dip  recession  in  2008-13.  The 
average  capitalisation  has  increased  and  the  stock  of  non-performing-loans  (NPLs)  has 
decreased,  albeit  remaining  above  the  euro-area  average.  The  liquidity  and  borrower  relief 
measures  granted  in  response  to  the  pandemic  have  contributed  to  an  expansion  in  lending,  in 
particular  to  corporates,  compared  to  2019  and  have  mitigated  the  impact  of  the  economic 
downturn  on  asset  quality.  However,  the  risks  of  a  rise  in  NPLs  and  a  further  deterioration  of 
banks’  profitability  once  these  support  measures  will  be  phased  out  need  to  be  considered  in 
order to avoid potential cliff edge effects. The sovereign-bank nexus remains present and banks 

10 JRC, SETIS Research and Innovation dashboards. Strategic Energy Technologies Information System. 
https://setis.ec.europa.eu/publications/setis-research-innovation-data 

13 

 
 
 
 
                                                 
recently increased the holdings of domestic sovereign debt in their portfolios. Access to finance 
has been a long-standing barrier to firms’ investment, notably for smaller and innovative firms, 
which often do not have sufficient  collateral.  In this context, access to non-bank finance needs 
improvement as private equity and venture capital are below the EU average and financing for 
start-ups remains also low. Sustainable finance, which could facilitate private investment and act 
as a catalyst for economic recovery and the transition to a green model of economic growth, is 
still under-developed. 

The labour market continues to face structural challenges that limit the growth potential of 
the Italian economy. Prior to the pandemic outbreak, the Italian labour market registered one of 
the  lowest  employment  rates  in  the  EU  (63,5%  vs  EU  average  73,1%)  and  one  of  the  highest 
unemployment  rates  (10%  vs  EU  average  6,7%).  Joblessness  remains  widespread,  especially 
among the young, and the participation rate of women, already among the lowest in the EU inter 
alia  due  to  an  insufficient  supply  of  childcare  and  long-term  care  services,  dropped  further  in 
2020, from 56,5% to 54,7% (from 67,9% to 67,5% for the EU average).  The overall impact of 
the pandemic shock was cushioned by the measures implemented by the government, but it still 
put  a  disproportionally  large  burden  on  women  and  young  people,  whose  employment 
relationships are often less secure, only temporary and more precarious. Nevertheless, an overall 
comprehensive  strategy  on  women  and  young  people  is  still  missing  while  additional  reforms 
remain  needed.  The  risk  of  in-work  poverty  remains  above  the  EU  average  (11,8%  vs  9,2%). 
Thus,  Italy  forgoes  a  substantial  part  of  its  labour  force  potential  and  entrenched  youth 
unemployment (or underemployment) prevents many young people from building up necessary 
skills and improving their employability. Effective active labour market policies (ALMP) could 
help  address  these  challenges.  However,  the  activation  component  of  the  minimum  income 
scheme, which requires  beneficiaries to  actively  take part in  programmes of socio-professional 
reintegration, was temporarily suspended in 2020.  Undeclared work remains a serious concern. 
The  shadow  economy  is  estimated  at  11,9%  of  GDP  in  201811,  accounting  for  roughly  3,7 
million  irregular  job  positions  (-1,3%  compared  to  2017),  with  especially  critical  sector 
conditions  in  services  to  persons,  agriculture,  construction,  trade,  transport,  housing  and  food 
services. 

Bridging the regional divide is set to support productivity and growth.  The recovery phase 
will be key in this respect, as shown by the previous crisis following which the South was still 
suffering from the largest drop in economic activity and a weaker recovery (Svimez, 2020). The 
South  lags  behind  economically,  as  well  as  in  terms  of  infrastructure  and  institutional  quality. 
Productivity and innovation are lower in the South. Competitiveness is also considerably worse 
in Southern regions, including due to weak transport infrastructure. On a positive note, the large 

11 Istat (2020), Economia non osservata nei conti nazionali, 14 Oct 2020, https://www.istat.it/it/archivio/248596 

14 

 
 
 
 
                                                 
recourse  to  smart  working  during  the  pandemic  appears  to  contribute  to  a  (temporary)  re-
population  of  Southern  regions  especially  by  young  people  (“South  working”).  Moreover,  the 
green transition can be an economic opportunity for the South, which has for instance a relatively 
high share of organically farmed land and renewable energy production12). 

Promoting social cohesion remains a challenge that might face even more difficulties due to 
the  pandemic.  Workers  with  expiring  temporary  contracts  and  to  a  lesser  degree  the  self-
employed  and job  seekers have so far borne the  brunt  of the crisis.  By  contrast,  the temporary 
extension  of  the  eligibility  and  duration  of  short-time  work  schemes  (Cassa  integrazione 
guadagni  –  CIG)  as  well  as  the  imposition  of  a  general  and  temporary  dismissal  ban  have 
shielded  most  other  employees,  in  particular  those  with  permanent  contracts,  from  job  losses. 
Further measures,  including social  transfers, also helped support household  disposable income. 
The  pre-existing  tax-benefit  system  and  the  emergency  policy  measures  have  cushioned  about 
two  thirds  of  the  shock  on  households’  income,  with  the  short-time  work  schemes  absorbing 
about 29% of the market income shock.13 However, the impact of the downturn is starting to be 
felt. In-work poverty was already high before the crisis and it remains marked by large regional 
differences. 
The  pandemic  has  put  the  healthcare  system  under  substantial  stress  and  revealed  its 
vulnerability  to  shocks.  Prior  to  the  COVID-19  pandemic,  the  Italian  healthcare  system  was 
performing better than those in many other Member States (e.g. by avoiding premature deaths or 
hospital admissions for some chronic diseases and low infant mortality). The good performance 
was  achieved  despite  years  of  low  levels  of  investments  in  physical  infrastructures  and  human 
resources (with health spending below the EU average, but with a relatively high proportion of 
expenditure  for  prevention).  Moreover,  healthcare  investment  was  unevenly  distributed  across 
regions,  resulting  in  disparities  of  accessibility  and  the  quality  of  health  care  provision  across 
regions.  The  outbreak  of  the  COVID-19  pandemic  made  clear  that  further  action  is  needed  to 
improve the resilience of the healthcare system to cope with future potential health crises and to 
respond to the growing needs of an ageing population with high a prevalence of chronic diseases. 
Moreover, the COVID-19 pandemic disrupted the provision of care services and hampered the 
access  to  healthcare,  generating  a  backlog  of  care  activities.  Thus,  improving  healthcare 
provision,  tackling  the  backlog  of  care  activities,  increasing  efficiency  and  reducing  the 

12 Country Report Italy 2020, European Commission. 
13   See  Christl,  M,  De  Poli,  S.,  Figari,  F.,  Hufkens,  T.,  Leventi,  C.,  Papini,  A.  and  Tumino,  A.  (2021)  “The 
cushioning effect of fiscal policy in the EU during the COVID-19 pandemic”, JRC Working Papers on Taxation 
and Structural Reforms, 02/2021 (forthcoming); and Almeida, V., Barrios, S., Christl, M., De Poli, S., Tumino, 
A., Van der Wielen, W. (2020): ‘Households´ income and the cushioning effect of fiscal policy measures during 
the  Great  Lockdown’,  JRC  Working  Paper  on  Taxation  and  Structural  Reforms,  06/2020,  available  at 
https://ec.europa.eu/jrc/sites/jrcsh/files/jrc121598.pdf. 

15 

 
 
 
                                                 
disparities  in  health  care  quality  across  regions  and  between  rural  and  urban  areas  are  key 
objectives.  

2.3 Challenges related to the green and digital transition 

2.3.1 Green dimension  

The recovery and resilience plan should contribute to the green transition and at least 37% 
of the financial allocation needs to contribute to climate objectives. The measures in the plan 
shall  contribute  to  achieving  the  2050  climate  neutrality  objective,  and  the  2030  energy  and 
climate targets, taking into account the Italian national energy and climate plan. They should also 
contribute  to  meeting  environmental  targets  for  waste,  water,  pollution  control,  sustainable 
mobility,  biodiversity  protection  and  restoration,  marine  and  water  resources,  and  support  the 
transition  to  sustainable  food  systems  as  well  as  to  a  circular  economy  as  appropriate,  while 
ensuring that nobody is left behind. 

GHG emissions  

Italy still has to reduce its GHG emission by 15 percentage points to meet the 2030 climate 
and  energy  targets,  which  might  be  further  revised  according  to  the  new  climate  objectives 
defined  by  the  green  deal.  Since  2005,  Italy  already  reduced  its  GHG  emission  by  18%,  but 
needs to meet the 33% binding target by 2030. Italy’s National Energy and Climate Plan (NECP) 
is in line to achieve this target under the Effort Sharing Regulation. The assessment of planned 
policies  and  measures  in  the  NECP  point  to  a  reduction  of  34,6%  by  2030,  which  should  be 
sufficient to meet the target.  

The green transition in Italy would have received a further boost from rapid phase-out of 
the fossil fuel subsidies identified in the NECP. On the basis on the detailed available analysis 
to existing (fossil) energy subsidies, there is scope to devise specific action to be accompanied by 
measures mitigating the risk of households’ energy poverty. 

Renewable energy  

Measures  are  needed  to  meet  2030  target  on  renewable  energy.  In  2019,  Italy  registered  a 
18.2%  share  of  renewable  in  gross  final  energy  consumption,  with  a  9%  share  in  transport 
(against an obligation of 14%), 35% in energy generation (against a projected share of 55%) and 
19,7%  in  heating  and  cooling  (with  an  average  annual  increase  in  line  with  Member  States’ 
obligation). While the 2020 target (17%) was met already in 2014, the renewable share in Italy 
has been substantially stagnating in the last few years (it was 18,3% in 2017). To reach the 30% 
share of renewables in gross final energy consumption by 2030 as stipulated in the NECP, Italy 
needs  to  swiftly  adopt  additional  policies  and  measures,  streamline  permitting  procedures  to 
reduce  administrative  burden,  revamp  and  repower  existing  installations.  The  planned  increase 
penetration  of  renewables  in  the  electricity  and  transport  sectors  represents  an  important 
challenge and should thus be supported by adequate policies. 

16 

 
 
 
Energy efficiency 

The  building  sector  has  a  central  role  in  meeting  the  energy  efficiency  targets.  Italy  sets 
sufficiently ambitious targets for energy efficiency in the NECP (with a contribution to the 2030 
target of 125 Mtoe in primary and 103,8 Mtoe in final energy consumption against current 2019 
levels  of, respectively, 145 Mtoe and 115 Mtoe)14. The building sector is  responsible for more 
than  one  third  of  total  energy  consumption  in  Italy.  Most  of  the  14,5  million  Italian  buildings 
(ISTAT)  were  built  before  criteria  for  energy  savings  and  corresponding  legislation  were 
adopted. In the context of the 2030 building renovation objectives, Italy aims at an annual deep 
renovation  rate  of  2,9%  in  the  non-residential  sector,  excluding  hospitals,  and  to  accelerate  by 
0,7%  for  the  residential  sector.  Reducing  administrative  burden  attached  to  national  incentives 
for energy efficiency renovations can make these more accessible and attractive to citizens and 
SMEs. Italy has notified its long-term renovation strategy, in line with the Energy Performance 
of Buildings Directive in April 2021.  

Sustainable transport  

Investments to decarbonise transport are key to reducing greenhouse gas emissions. Indeed, 
transport is responsible for over 30% of total GHG emissions by Italy (above the EU average). 
Decarbonisation  of  transport  is  also  important  to  decreasing  dependency  on  fossil  fuels  and 
energy  import,  and  improving  air  quality  and  human  health.  Three  infringements  of  EU 
Directives on air quality are open against Italy, notably in the Po Valley. In 2018, it is estimated 
there were 920 years of life lost/105 residents from particulate matter (PM2.5) and 183 years of 
life lost/105 residents from nitrogen dioxide (NO2). Transport accounts for a very large share of 
CO2, NO2 and particulates emissions due to high road traffic share (over 80 % of trips made by 
private  car  and  37  hours  lost  per  driver  per  year)  and  inefficient  internal  combustion  engines. 
Italy  is  lagging  behind  in  the  roll-out  of  Zero  Emission  Vehicles  (ZEV)  and  related 
infrastructure,  that  needs  a  substantial  boost  to  keep  pace  with  the  NECP  ambition  (6  M  EV 
before 2030) and lags also in providing adequate cycling infrastructure in cities. Technologically 
obsolete and very polluting vehicles make up 59% of the public transport fleets (notably buses) 
in 2018, specifically in Southern Italy, calling for the deployment of cleaner technologies in line 
with the ambitions of the NECP). New registrations of electric vehicles (EV) are lower than in 
peer countries (4% EU average, albeit +180% in 2020). The same applies to alternative vehicles 
recharging  and  refueling  infrastructure;  ZEV  only  represent  0,1%  of  the  total  vehicle  fleet.  If 
managed more efficiently, ports can play a key role in making Italy a sustainable logistics hub 
linked via long distance rail connections and using digital cargo clearance. However, the growth 
of Italian ports has remained sluggish. The South lags behind in “sustainable infrastructure” with 

14  Economidou,  M.,  Ringel,  M.,  Valentova,  M.,  Zancanella,  P.,  Tsemekidi  Tzeiranak,  S.,  Zangheri,  P.,  Paci,  D., 
Ribeiro Serrenho, T., Palermo, V. and Bertoldi, P., National Energy and Climate Plans for 2021-2030 under the EU 
Energy Union, EUR 30487 EN, Publications Office of the European Union, Luxembourg, 2020, ISBN 978-92-76-
27013-3, doi:10.2760/678371, JRC122862 

17 

 
 
                                                 
an  index  of  83%  of  the  national  average  for  electrified  railways15  and  21%  for  multimodal 
logistic  platforms.  The  quality  of  regional  and  suburban  railway  infrastructure  endowment  and 
services is still lagging behind. 

Circular economy and water resources 

Important regional disparities persist in waste management and the circular economy. Italy 
does  not  have  yet  a  national  strategy  for  circular  economy16.  Italy  performs  above  the  EU 
average  for  resource  productivity  and  investment  in  the  circular  economy,  although  regional 
disparities are significant. Overall, Italy is not considered at risk of missing the EU 2020 targets 
for reuse/recycling of waste but could face challenges to meet the 2025-30 objectives. However, 
some  regions  in  the  Centre-South  display  poor  management,  low  separation  and  an  excessive 
share of landfilling. A national waste programme is under adoption and complementarity needs 
to be ensured with  regional waste plans. National legislation has set  a very ambitious target of 
achieving 60% sorted waste collection by 2030.  

Insufficient investment is  being  made in water infrastructure in the  South, while scarcity 
and  drought  risks  continue.  The  fragmentation  of  the  sector  in  terms  of  different  actors  (i.e. 
the  regulator  ARERA,  concessionaires,  public-private  operators) 
public  administration, 
represents  a  barrier  to  investment17.  A  total  of  895  agglomerations  have  been  found  to  be  in 
breach  of  the  EU  Urban  Waste  Water  Treatment  Directive  affecting  a  population  of  over  26.7 
million people, and fines are currently being paid for 68 of them. The cost to comply with urban 
wastewater  treatment  requirements  has  been  estimated  by  the  OECD  at  some  EUR  34  billion 
until 2030 for Italy as a whole. Italian water consumption per capita is among the highest in the 
EU. Italy is also one of the EU countries with the highest recourse to irrigation for agricultural 
purposes. While agriculture accounts for around 50% of water consumption, charges for the use 
of  water  in  agriculture  are  very  low,  especially  in  the  South.  This  suggests  that  there  is  much 
scope  for  using  price  incentives  to  better  align  supply  and  demand.  Governance  reforms, 
including  for  capacity  building  projects  for  municipalities,  are  needed  and  public-private 
partnerships  need  to  be  strengthened  to  attract  also  private  investment,  especially  in  Southern 
regions. There are important investment18 needs in waste prevention, public reuse, and separate 
collection as a precursor to quality recycling and recycling capacity.  

Biodiversity  and  climate  change  mitigation  require  due  attention.  Italy  is  particularly 
vulnerable  to  climate  change,  hydrogeological  events  and  seismic  activity.  Over  7  000  Italian 

15 Data for 2019 from Svimez Report 2019 (based on Eurostat data).  
16 Nevertheless, there are a number of national and regional activities taking place, notably the so-called “Collegato 
Ambientale 2020” on “Green New Deal and ecological transition of the country”. 
17Comitato di esperti in  materia economica  e sociale , Iniziative per il rilancio  “Italia 2020-2022” , Giugno 2020. 
Available at https://www.governo.it/sites/new.governo.it/files/comitato_rapporto.pdf . 
18  The  Eunomia  &  COWI  study  (2019)  for  the  European  Commission    estimated  capital  and  investment  costs 
requirements in waste in Italy for the period 2021-2027 amounted to 2.3 billion EUR.  

18 

 
 
                                                 
municipalities are at high risks from landslides and flooding (more than 90% of the total) and in 
terms of the surface area this covers around 50 000 km2 of the national territory, one sixth of the 
total.  Investment  in  prevention for hydrogeological  risks (in line with  EU Flood  Risk  Plans) is 
needed to reduce emergency expenditures. 

10% of the assessments for habitats and 43% of the assessments for species of EU interest 
indicate a favorable conservation  status. And from 2000 to 2020 the population of farmland 
birds  in  Italy  has  decreased  by  28,8%.19  The  categories  of  habitats  that  show  the  worst 
conservation  status  are  freshwater  habitats,  grasslands  and  dunes.  These  data  show  an  urgent 
need to invest in the restoration of nature in Italy. To contribute to the fight against biodiversity 
loss  and  climate  change,  investments  are  also  needed  to  increase  the  quantity  and  quality  of 
forests, with appropriate biodiversity-friendly afforestation and reforestation and closer-to-nature 
management  practices.  Investment  in  soil  decontamination  of  former  industrial  sites  and  other 
polluted  areas  remains  necessary  inter  alia  to  promote  biodiversity  and  the  health  of  the 
surrounding  communities,  in  line  with  EU  and  national  legislation.  Furthermore,  green 
infrastructure and other nature-based solutions are to be preferred for flood and drought control 
before  ‘traditional’  hard  infrastructure.  Restoration  of  healthy  ecosystems  is  a  priority  for 
agriculture, which is the main source of pressure and threats on Italian natural habitats. 

The  share  of  SMEs  offering  green  products  or  services,  investing  in  equipment  linked  to 
clean technologies pollution control is below EU averages. In 2020, among Italian firms that 
grew their revenues in  the past  three  years, the  share of eco-innovative  ones is  equal  to  10%  - 
considerably  lower  than  the  EU  average  of  30%.  This  is  in  line  with  the  lower  number  of 
sustainable activities performed, such as resource savings or recycling. However, it contradicts 
the higher than the EU average values related to green patenting. Despite the low eco-innovative 
attitude, Italian firms may find particularly convenient to patent their activities in green sectors20. 
Attention  to  environmental  sustainability  increases  with  firm’s  size,  with,  for  instance  91%  of 
firms with 50 or more employees separating their waste collection. 71% controlling energy use 
and  56%  water  use21.  ”Transizione  4.0“  offers  incentives  to  support  the  circular  economy 
investments of firms. 

The table below gives an overview of Italy objectives, targets and contributions under Regulation 
(EU)  2018/1999  of  the  European  Parliament  and  of  the  Council  of  11  December  2018  on  the 
Governance of the Energy Union and Climate Action. 

19 According to the data provided by Italy in 2019 in the context of the 6-year reporting under the Birds and Habitat 
Directives. 
20 Benedetti Fasil, C., Del Rio, J.C., Domnick, C., Fako, P., Flachenecker, F., Gavigan, J., Janiri, M., Stamenov, B. 
and Testa, G., High Growth Enterprises in the COVID-19 Crisis Context, 2021, JRC124469 
21  ISTAT,  (2020).  “Statistica  sperimentale.  Comportamenti  d'impresa  e  sviluppo  sostenible”,  available  at: 
https://www.istat.it/it/archivio/239170  

19 

 
 
 
 
                                                 
National targets and contributions22  

Latest 
available 
data 

2020 

2030 

Assessment of 2030 
ambition level 

-19 (2019) 

target 

Binding 
for  greenhouse  gas 
emissions  compared  to  2005  under  the 
Effort Sharing Regulation (%) 
National target/contribution for 
renewable  energy:  Share  of  energy  from 
final 
renewable 
consumption of 
energy (%) 
National contribution for energy efficiency: 

in  gross 

sources 

18,1 
(2019) 

-13 

-33 

As in ESR 

17 

30 

Sufficiently 
ambitious 
(29% is the result of 
RES formula) 

Primary energy consumption (Mtoe) 

Final energy consumption (Mtoe) 

145 
(2019) 
115 
(2019) 

158 

125,1 

sufficient 

124 

130,8 

sufficient 

Level of electricity interconnectivity (%) 

8,8 

8 

10 

n.a. 

2.3.2 Digital dimension  

The  recovery  and  resilience  plan  should  contribute  to  the  digital  transition  and  at  least 
20% of the financial allocation needs to contribute to digital objectives. The measures in the 
plan should, inter alia, contribute to the digital transformation of the economic and social sector 
(including  public  administration,  public  services,  and  the  justice  and  health  systems).  The 
objective of the measures in the plan should be to improve not only the competitiveness, but also 
the  resilience,  agility  and  security  of  companies  and  public  actors,  all  while  ensuring 
inclusiveness.  

Improving  the  digital  skills  of  the population and workforce  is  a priority  for  Italy.  In  the 
Digital  Economy  and  Society  Index  (DESI)  2020,  in  relation  to  the  human  capital  dimension, 
Italy ranked last in the EU. The country is faced with significant shortcomings in both basic and 
advanced digital skills, which are reflected in an increasing digital divide amongst the population 
and a low capacity to develop and deploy digital technologies. Only 42% of people aged 16-74 
years have at least basic digital skills (56% in the EU-27) and only 22% have above basic digital 
skills (31% in the EU-27). Only 1,3% of Italian graduates are ICT graduates (the lowest in the 
EU, with the EU-27 average being 3,8%), while evidence indicates significant skill mismatches, 
especially  in  areas  such  as  cloud,  cybersecurity  and  artificial  intelligence.  Some  48%  of  the 

22 Sources:  
i) Assessment of the final national energy and climate plan of Italy, SWD (2020) 911 final.  
ii) Eurostat data for specific years. 

20 

 
 
 
 
 
 
 
 
 
 
 
 
                                                 
workforce does not  have at  least  basic digital  skills, which are needed in the large majority of 
jobs today23 and, in 2020, only 15% of Italian enterprises offered training to their employees to 
develop/upgrade their ICT skills, a figure that decreased by almost 4 percentage points compared 
to 201924. In order to address the above shortcomings, the education of advanced digital skills at 
post-graduate  level  is  to  be  improved25.  Although  Italy  holds  an  above  average  proportion  of 
postgraduate  programmes  including,  among  the  others,  content  on  artificial  intelligence, 
cybersecurity or data science, the proportion of university places teaching advanced technologies 
offered to students is still below the EU average.26 In terms of policy response, Italy launched its 
first Digital Skills Strategy in July 2020, completed with an Operational Plan in December 2020. 
The Plan set some ambitious targets for 2025, such as such: reaching 70% of the population with 
at  least  basic  digital  skills  and  closing  the  gender  gap,  doubling  the  share  of  population  with 
advanced digital skills and increasing by 50% in the share of SMEs using ICT specialists. The 
launch  of  the  strategy  and  its  accompanying  plan,  building  on  the  pre-existing  project 
“Repubblica  Digitale”  gave  impetus  to  a  number  of  initiatives  for  the  training,  reskilling  and 
upskilling  of  citizens,  students  and  workers  during  2020,  by  also  leveraging  on  partnerships 
between  schools,  universities,  technology  transfer  centers  and  industry.  Measures  for  the 
development of digital skills are also part of ‘Transition 4.0’ (Transizione 4.0), which includes 
the tax credit for ‘Training 4.0’. 

Despite being one of the largest EU economies and accounting for a significant share of the 
EU  ICT  sector,  the  level  of  digitisation  of  businesses  remains  low.  The  Italian  economy  is 
mostly  characterized  by  small  and  micro-enterprises,  with  a  significant  presence  of  family-
owned businesses, with low levels of digital intensity and of digital knowledge. In DESI 2020, 
Italy  ranked  22nd  in  the  EU  (out  of  28  countries)  in  the  EU  on  the  Integration  of  digital 
technology  by  businesses.  Latest  data  shows  that  Italy  is  catching  up  when  it  comes  to  the 
digitisation of its enterprises, but the overall picture is scattered. Italy is above the EU average as 
regards the share of SMEs with at least a basic level of digital intensity27 (69% versus 60% in the 
EU-27) and the percentage of businesses using cloud services28 is relatively high (38% in Italy, 

23 Digital Economy and Society Index 2020.  
24 Eurostat - Community survey on ICT usage and eCommerce in Enterprises, 2020.  
25 Righi, R., Lopez Cobo, M., Alaveras, G., Samoili, S., Cardona, M., Vazquez-Prada Baillet, M., Ziemba, L.W. and 
De Prato, G., Academic Offer of Advanced Digital Skills in 2019-20. International Comparison,2020  JRC121680. 
26 Gomez Losada, A., Lopez Cobo, M., Samoili, S., Alaveras, G., Vazquez-Prada Baillet, M., Cardona, M., Righi, 
R.,  Ziemba,  L.W.  and  De  Prato,  G.,  Estimation  of  supply  and  demand  of  tertiary  education  places  in  advanced 
digital profiles in the EU,  2020JRC121683. 
27 The digital intensity score is based on counting how many out of 12 selected technologies are used by enterprises. 
A basic level requires usage of at least 4 technologies (Eurostat, Community Survey on ICT usage and eCommerce 
in Enterprises, 2020).  
28 Enterprises purchasing at least one of the following cloud computing services: hosting of the enterprise's database, 
accounting software applications, CRM software, computing power (Eurostat, Community Survey on ICT usage and 
eCommerce in Enterprises, 2020). 

21 

 
 
                                                 
26% in  the EU-27). However,  gaps  remain in  other areas, such as the use of big data29 (9% in 
Italy versus 14% in the EU-27), and of Artificial Intelligence30 (18% in Italy versus 25% in the 
EU-27),  while  the  gap  between  Italy  and  the  EU  average  is  widening  regarding  e-commerce 
(only 11% of Italian SMEs sell online, well below  the EU-27 average of 17%)31. The National 
Plan  ‘Transition  4.0’  has  been  one  of  the  main  instruments  used  to  support  the  digital 
transformation of Italian enterprises and has substantially evolved over the years. Tax deductions 
for investment in capital goods (i.e., super- and hyper-depreciation) have proved to be effective 
in stimulating digital uptake. However, these measures were mainly used by medium and large 
enterprises, with an unbalanced uptake in the North of Italy. Among other initiatives, in order to 
further  support  SMEs  towards  the  digital  transition,  the  government  in  collaboration  with 
stakeholders has created and gradually  expanded a network composed of Competence Centres, 
Digital Innovation Hubs and “Punti Impresa Digitale”32. A recently launched portal (Atlante 4.0) 
provides  a  mapping  of  the  centres  that,  across  the  country,  provide  technology  transfer  and 
digital  transformation  services.  Moreover,  several  initiatives  of  the  Digital  Skills  Strategy 
leverage on the network of technology transfer centers to support training.  

In  the  DESI  2020,  Italy  ranked  19th  in  in  the  EU  on  Digital  public  services.  During  2019 
and  2020,  Italy  accelerated  the  implementation  of  key  e-government  projects  and  made 
good  progress  in  the  offer  of  digital  public  services,  but  the  level  of  online  interaction 
between public authorities and the general public remained very low: in 2020, only 36% of 
Italian  internet  users  used  e-government  services  (64%  in  the  EU-27)33.  In  July  2020,  the 
government  adopted  the  ‘Three-Year  Plan  for  Information  Technology  in  the  Public 
Administration  2020  –  2022’,  an  update  of  two  previous  plans.  The  plan  addresses  a  range  of 
areas:  from  the  reinforcement  of  the  digital  infrastructure,  to  data  interoperability,  enabling 
platforms and cybersecurity. The “Simplification Decree” issued in July 2020 further promoted 
digitisation  process  in  the  public  administrations,  by  mandating  the  adoption  of  the  main 
eGovernment  platforms  by  all  public  administrations  by  the  1st  quarter  2021:  this  includes  the 
eIDAS-compliant e-identity system as the only access method to eGovernment services, PagoPA 
for  all  payments  to  public  sector,  and  the  implementation  of  mobile  version  of  eGovernment 
services  on  the  app  “IO”.  Although  the  implementation  of  the  Simplification  Decree  is  still 
ongoing,  the  take-up  of  digital  identity  (SPID)  and  app  “IO”  by  users  has  greatly  increased 
during  2020  (to  20  million  and  11  million  respectively  in  April  2021),  also  thanks  to  their 
mandatory  use  in  some  governmental  financial  incentives  schemes.  As  an  accompanying 

29 Eurostat, Community Survey on ICT usage and eCommerce in Enterprises, 2020. 
30  Enterprises  using  at  least  2  AI  technologies  (European  enterprise  survey  on  the  use  of  technologies  based  on 
artificial intelligence by Ipsos and iCite, 2020). 
31 Eurostat, Community Survey on ICT usage and eCommerce in Enterprises, 2020. 
32  In  2020,  Italy  selected  45  national  poles  in  view  of  the  network  of  European  Digital  Innovation  Hubs  for  the 
deployment of emerging technologies (supported in the context of the Digital Europe Programme). 
33 Eurostat - Community survey on ICT usage in Households and by Individuals.  

22 

 
 
                                                 
measure,  a  “Fund  for  Innovation  and  Digitalization”  was  established  to  support  municipalities 
and local authorities in creating digital services.  

Italy should close the gaps in terms of coverage and take up of gigabit connectivity, which 
undermines  digital  inclusion  and  the  development  of  a  competitive  digital  business 
ecosystem.  In  DESI  2020,  Italy  ranked  17th  among  the  EU-28  countries.  The  pace  of  fibre 
deployment  decreased  between  2019  and  202034.  Coverage  in  fixed  Very  High-Capacity 
Networks (VHCNs) was relatively low in July 2020 and below the EU average (with only 34% 
of households covered, against an EU average of 59%). Broadband take-up is well below the EU 
average with limited progress in the last years. While Italy performs well above the EU average 
in terms of 5G readiness (60% vs EU average of 39%), only 8% of populated areas are covered 
by 5G mobile networks (against 14% at EU level)35. The Ultra-Broadband (BUL) Plan has been 
the  key  instrument  to  boost  connectivity  in  the  country.  Phase  I  is  focused  on  the  coverage  of 
Next Generation Access (NGA) white areas36; despite an acceleration in 2020, delays - due also 
to lengthy procedures for obtaining permits for civil works and to the payment of an unusually 
high first connection fee - still affect the full achievement of the objectives of the Plan. Phase II 
includes network deployment measures in NGA grey areas37, support for demand (in the form of 
vouchers  for  families  and  businesses  to  acquire  new  connecting  technologies38)  and  Gigabit 
connectivity to socio-economic drivers (“school  plan”). Moreover, in 2020, the “Simplification 
law” introduced, among others, measures to simplify 5G deployment39. Overall, it is important to 
accelerate the deployment of VHCNs, to address bottlenecks and simplify administrative burden, 
while strategically associating the National Broadband Plan to the development of over-the-top 
data-rich  services  and  to  industrial  recovery,  through  high-capacity  digital  connectivity  for 
industrial districts and other socio-economic drivers. It is also essential to support high-capacity 
digital connectivity and take-up in white areas where, despite the EU 2020 broadband objectives 
and  significant  public  investment,  unsolved  last-mile  connectivity  issues  still  prevent  many 
residents  and  scattered  houses  from  having  high-capacity  digital  connectivity.  Fiber  To  The 
Premises  (FTTP) only  covers 8,4% of households in  rural  areas (against an average of 25%  at 
EU level)40. 

Regarding  advanced  digital  technologies,  Italy  is  a  key  player  in  the  race  to  EU 
technological  sovereignty  and  can  count  on  a  number  of  resources  and  initiatives  that 

34 Fibre-to-the-premises – FTTP - coverage passed from 24% covered in July 2018, to a good 30% in July 2019 but 
only 34% in July 2020. 
35 Broadband coverage in Europe studies for the European Commission by IHS Markit, Omdia and Point Topic. 
36  NGA  white  areas  are  areas  where  no  NGA  network  capable  to  reliably  provide  at  least  30  Mbps  download  is 
present or planned in the next three years from the moment of publication of the planned aid measures. 
37 NGA grey areas: areas where there is one infrastructure able to support speeds above 30 Mbps download  present 
or planned in the next three years from the moment of publication of the planned aid measure. 
38 The Voucher plan was launched during 2020. 
39 Law Decree 16 July 2020, n. 76, on Urgent measures for simplification and digital innovation.  
40 IHS Markit, Omdia, Point Topic and VVA, Broadband coverage in Europe studies. Figure referred to 2020. 

23 

 
 
                                                 
should be better exploited and leveraged. The country is one of the eight hosting sites of a pre-
exascale class computer funded by the EuroHPC Joint Undertaking. Italy is involved in a number 
of  European  initiatives  in  areas  such  as  cloud  and  microelectronics41  and,  in  2019,  the 
government launched two new national strategies, one on Artificial Intelligence and another on 
Blockchain.  Italy  should  build  on  these  strengths  to  scale-up  knowledge-intensive  industries, 
create  jobs  and  raise  its  competitiveness,  also  with  a  view  to  promote  Europe’s  open  strategic 
autonomy  in  key  sectors.  The  highest  shares  of  high-growth  enterprises  are  indeed  found  in 
knowledge-intensive  and  medium-high  tech  manufacturing  industries42.  The  strategy  ‘Italy 
2025’,  launched  in  December  2019,  also  announced  a  number  of  initiatives  to  support  the 
development  and  uptake  of  key  technologies,  such  as  Artificial  Intelligence,  robotics  and 
cybersecurity. The strategy also indicates environmental sustainability of ICT solutions as one of 
the guiding principles. The national plan for industry 4.0 offers a range of support instruments to 
address the increasing digitalisation of the energy sector. 

Note: EU aggregate corresponds to EU28, based on 2020 DESI report. 

41  For  example,  participation  in  the  first  Important  Project  of  Common  European  Interest  (IPCEI)  on 
microelectronics; signatory of the joint Member State Declaration ‘Building the next generation cloud for business 
and  public  sector  in  Europe’.  At  the  end  of  2020,  Italy  joined  GAIA-X  (a  project  for  an  open  federated  data 
infrastructure)  and,  together  with  France,  Germany  and  Spain  proposed  the  IPCEI  on  Next  Generation  Cloud 
Infrastructure and Services (IPCEI-CIS) to finance the development of the next generation of cloud infrastructures 
and services in the EU.  
42 Flachenecker, F., Gavigan, J., Goenaga Beldarrain, X., Pasi, G., Preziosi, N., Stamenov, B. and Testa, G., High 
Growth Enterprises: demographics, finance and policy measures, 2020, JRC119788. 

24 

 
 
 
 
                                                 
Box 2.3.3: Progress towards the Sustainable Development Goals 

(green 

transition, 

The  objectives  of  the  Sustainable  Development  Goals  are  integrated  in  the  European  Semester 
since the 2020 cycle. This provides a strong commitment towards sustainability in coordination 
of  economic  and  employment  policies  in  the  EU.  In  that  respect,  this  section  outlines  Italy’s 
performance  with  respect  to  SDGs  with  particular  relevance  for  the  four  dimensions 
underpinning the 2021 Annual Sustainable Growth Strategy and of relevance to the recovery and 
resilience  plans 
transition  and  productivity,  and 
fairness,  digital 
macroeconomic stability), indicating possible areas where investments and reforms in line with 
the objectives of the Facility could further accelerate the progress on the SDGs. 
Italy is making progress in achieving the United Nations’ Sustainable Development goals. Over 
the past five years, progress has been relevant in most of the UN Sustainable Development Goals 
(SDGs).  In  this  context,  Italy’s  initiative  on  well-being  indicators  (based  on  the  well-being 
evaluation scale -WES) and on SDGs at national and regional level is a European best practice 
supported  by  civil  society  organisations  (Italian  Alliance  for  Sustainable  Development  – 
ASVIS).43 

43 Documento PNRR 2021 (asvis.it), 27.05.2021. 

25 

 
 
  
                                                 
Sustainable Development Goals and the four dimensions underpinning the Annual 
Sustainable Growth Strategy.

Green Transition  
In  recent  years,  Italy  achieved  positive  results  on  many  of  the  SDGs  related  to  environmental 
sustainability. Significant progress was registered in the SDG 13 (Climate Action), particularly 
concerning Climate Mitigation. Italy  also performed well on the SGD 7 (Affordable and Clean 
energy),  in  particular  under  the  domain  of  Energy  consumption.  Progress  has  been  achieved 
towards  the  SDG  12  (Responsible  consumption and  Production)  where  Italy  scores  better  than 
the EU27 average in most of the indicators. Finally, between 2013 and 2018, Italy improved its 
performance  also  on  SDG  6  (clean  water  and  sanitation)  and  SDG  11  (sustainable  cities  and 
communities). 
The Plan includes a number of measures that are expected to support Italy in further speeding up 
the achievement of the green transition related SDGs. To this end, the components related to the 
green revolution, ecological transition, and sustainable transport are particularly relevant as well 
as the measures on energy efficiency of private and public building included in other components 
of the Plan. 

Fairness  
Italy  has  made  limited  progress  towards  SDG1  (no  poverty)  with  some  indexes  worsening 
between  2013  and  2018.  In  2018,  Italy  scored  worse  than  the  EU  average  in  all  the  indicators 
concerning  multidimensional  poverty.  Italy  underperforms  in  the  dimensions  related  to  SDG  4 

26 

 
 
 
 
 
(Quality Education) with the educational outcomes achieved by Italian students being below the 
EU  average,  and  subject  to  territorial  disparities.  Italy  underperforms  also  in  the  dimensions 
related  to  SDG  5  (gender  equality),  scoring  worse  than  the  EU  average  on  gender  gap  in 
education  and  employment  whereas  the  gap  in  leadership  position  scores  better  than  the  EU 
average. While SDG 10 (Reduce Inequality) presents a mix picture, some progress was made in 
achieving SDG 3 (good health and well-being) over the last years, with the country scoring better 
than the EU average on “healthy life”, “life expectancy at birth” and “share of people with good 
or very good perceived health”. 
The  Plan’s  components  related  to  employment  policies,  social  and  territorial  cohesion,  social 
institutions  and  the  health  system  are  expected  to  significantly  contribute  in  improving  Italy’s 
performance concerning the SDGs related to fairness. These components are complemented by 
targeted measures on education and skills focusing on women and gender equality. 

Digital transition and productivity  
Italy is underperforming in all targets related to the digital transition and productivity dimension 
that fall under SDG 8 (decent work and economic growth) and SDG 9 (industry, innovation and 
infrastructure). Despite some improvements observed since 2013, the investment share of GDP 
as well as the gross domestic expenditure in R&D remain well below the EU averages. Similarly, 
Italy slightly increased the share of personnel employed in R&D over the same period, but it is 
still lagging behind in comparison with other European peers. 
The Plan is expected to largely contribute to supporting Italy to speed up progress concerning the 
digital  transition  and  productivity.  Particularly,  measures  to  boost  the  digitalisation  of 
infrastructure  and  services  are  present  in  almost  every  component  of  the  plan.  Significant 
investments are envisaged to digitalise public administration, the justice and education systems, 
as  well  as  the  touristic  and  cultural  sector.  Measures  are  also  envisaged  to  boost  productivity, 
particularly  under  the  components  on  the  digitalisation  and  competitiveness  of  the  productive 
system and on research and innovation. 

Macroeconomic stability  
Italy’s  performance  under  SDG  8  (decent  work  and  economic  growth)  remains  below  the  EU 
average. The employment rate remains lower than the EU average and Italy is losing ground on 
real  GDP  per  capita.  The  investment  share  of  GDP  is  still  far  from  the  EU  average,  although 
some improvements  have been  recorded in  recent  years. Concerning SDG 17 (Partnerships for 
the goals), Italy’s public debt remains an important source of vulnerability for the economy. In 
addition, the already high public debt stock has significantly increased to mitigate the impact of 
the COVID-19 pandemic. With regards to SDG 16 (peace, justice and strong institutions), Italy 
made progress towards ensuring peace and personal security. The current level for the perceived 
independence  of  the  judiciary  remains  below  the  EU  average  but  with  a  positive  trend  since 
2013. 
A  number  of  structural  horizontal  reforms  included  in  the  plan  are  expected  to  significantly 
contribute  to  improve  Italy’s  performance  concerning  macroeconomic  stability  SDGs.  The 
reform  of  the  public  administration,  the  justice  system  as  well  as  the  measures  against  tax 
evasion, undeclared work and employment policies reforms are particularly relevant to this end. 

27 

 
 
 
 
3.  OBJECTIVES, STRUCTURE AND GOVERNANCE OF THE PLAN 

3.1. Overall strategy of the plan  

The Italian Plan is expected to address a significant subset of  Italy’s structural challenges 
focusing on three horizontal priorities: digitalisation and innovation, ecological  transition 
and  social  inclusion.  The  investments  and  reforms  included  in  the  Plan  aim  at  reducing  the 
Italian  digital  and  innovation  gap  both  among  firms  and  in  the  public  administration  so  as  to 
enhance  productivity,  competitiveness  and  the  capacity  to  adapt  to  changes.  The  measures 
related  to  the  ecological  transition  are  also  aimed  at  enhancing  competitiveness,  as  well  as  at 
creating new productive activities and stable jobs, while minimizing the environmental footprint 
of production. Finally, the measures related to social inclusion aim at reducing territorial, gender 
and  generational  divides  so  as  to  reduce  the  inequalities  worsened  by  the  pandemic  and 
ultimately support economic growth. The Plan includes 16 components (see Table 3.1) structured 
around 6 areas of interventions, so-called “Missions”, covering all seven European flagships.  

A  chapter  of  the  Plan  is  dedicated  to  horizontal  and  enabling  reforms44  with  the  aim  of 
improving  the  effectiveness  of  public  administration,  including  for  the  absorption  of  the 
Recovery  and  Resilience  Facility  resources,  and  fostering  the  business  environment.  This 
chapter includes measures improving the management of public employment, reducing red tape 
and  strengthening  administrative  capacity.  A  reform  of  the  justice  system  is  also  included  to 
reduce the length of civil and criminal proceedings, improve the efficiency of the justice system 
and reduce the backlog of pending cases. The Plan includes measures to improve regulations in 
certain  specific  sectors  and  remove  a  number  of  barriers  to  competition.  More  specifically, 
substantial reforms are envisaged to simplify the public procurement framework, reduce  public 
administration’s  late  payments, prioritise  competitive  processes  to  award  local  public  service 
contracts  and  limit  authorisations  (concessions)  over  alternative  awarding  solutions.  Some 
reforms have been included to support the sustainability of public finances, namely by improving 
the tax administration and enhancing the efficiency of public expenditure. Sectoral  reforms  are 
also included, such as the plan to combat undeclared work and to strengthen active labour market 
policies or the reforms pertaining to the education system. 

Mission 1 (digitalisation, innovation, competitiveness, culture and tourism) is built around 
three components related to public administration, innovation, competitiveness and culture 
and  tourism.  Component  M1C1  includes  a  balanced  mix  of  reforms  and  investments  to 
enhance  the  administrative  capacity  of  the  Italian  public  administrations  at  central  and  local 

44 The milestones and targets to be achieved for these reforms in the Council Implementing Decision are included in 
Component M1C1 for the reforms of Public administration, justice system, taxation and public procurement. The 
milestones and targets for the competition law are included in Mission 1 component 2. 

28 

 
 
 
 
                                                 
levels,  both  in  terms  of  human  capital  (selection,  competences,  and  careers)  and  in  terms  of 
simplification  of  administrative  procedures  and  digitalization.  Component  M1C2  consists  of 
different  types  of  instruments  to  support  the  digital  transition  and  the  innovation  of  the 
production system. In this respect, Transition 4.0 is a large measure envisaging tax incentives for 
investment  in  4.0  technologies,  research,  development  and  innovation  as  well  as  training  in 
digital skills. Component M1C2 also envisages a significant investment in digital infrastructure 
for  the  deployment  of  ultra-fast  broadband,  5G  and  satellite  connections.  This  component  also 
includes  financial  support  to  promote  the  development  of  firms  (including  SMEs)  operating  in 
strategic  value  chains,  and  to  increase  the  competitiveness  of  companies,  for  instance  by 
supporting  internationalisation  processes.  In  combination  with  these  measures,  the  component 
supports the development of the strategic value chain of microelectronics by investing in Silicon 
Carbide substrates, which is a necessary input for the manufacturing of semiconductors. Finally, 
the  component  includes  a  reform  of  the  industrial  property  system  to  foster  its  potential  and 
provides for financial support of industrial property-related projects of companies and research 
bodies.  Component  M1C3  includes  measures  to  promote  the  creative  and  cultural  sector  and 
increase the competitiveness and resilience of the tourism ecosystem, including by enhancing the 
digital and green transition.  

Mission  2  (green  revolution  and  ecological  transition)  includes  interventions  aimed  at 
promoting the circular economy, renewable energy, sustainable mobility, hydrogen, energy 
efficiency of private and public buildings; and at tackling hydrogeological risks, and water 
and  waste  management.  These  initiatives  are  key  to  support  the  swift  implementation  of  the 
Italian climate, renewables and energy efficiency objectives as enshrined in the National Energy 
and  Climate  Plan.  Component  M2C1  is  a  wide-ranging  component,  which  includes  an 
ambitious  and  welcome  set  of  interventions  that  concern  waste  management,  the  circular 
economy  in  municipalities,  as  well  as  support  for  the  competitiveness  of  the  agri-food 
ecosystem,  with  the  ambition  of  reducing  GHG  emissions,  developing  precision  farming  and 
strengthening  the  bio-economy.  Component  M2C1  also  includes  investments  in  green 
islands,  which  aim  at  a  significant 
communities,  small  non-interconnected  maritime 
improvement  in  energy  efficiency  and  environmental  sustainability.  Component  M2C2 
envisages investments in renewables, hydrogen and the mobility ecosystem, including significant 
investments  in  production  chains  of  the  key  sectors  of  the  ecological  transition  (photovoltaic, 
batteries for the transport sector and for the electricity sector, buses supply chain and hydrogen), 
aiming  at  developing  industrial  and  knowledge  excellence  in  these  fast-growth  industries. 
Ultimately,  these  interventions  promote  Europe’s  open  strategic  autonomy  in  line  with  the  EU 
Industrial  Strategy45.  Important  investments  in the renewal  of the local  public transport current 

  COM(2021)  350 

45 
strategy.pdf 

final,  https://ec.europa.eu/info/sites/default/files/communication-new-industrial-

29 

 
 
 
                                                 
fleet  by  clean  vehicles  and  on  the  development  of  urban  transport  modes  (e.g.  metros,  cycles 
lanes,  tramways,  etc.)  are  also  envisaged  under  this  component.  Component  M2C3  has  the 
objective  to  increase  the  energy  efficiency  of  both  private  and  some  public  buildings  (e.g. 
schools, justice), one of the best levers for reducing emissions in a country with more than 60% 
of  the  building  stock  over  45  years  old,  both  in  public  and  in  private  buildings.  Component 
M2C4 sets out actions to improve the management of water resources and to make the country 
more resilient to climate change. These measures include a set of reforms in the water sector, the 
mitigation of hydrogeological and seismic risks, the preservation of green areas and biodiversity, 
the elimination of water and soil pollution in line with the EU zero pollution ambition, and the 
sustainable  management  of  water  resources.  The  component  also  includes  completing  the 
national program on air pollution control. 

Mission 3 (infrastructures for sustainable mobility) aims to develop the high-speed network 
and  its  capacity,  to  strengthen  the  regional  network  and  to  make  Italian  ports  more 
competitive  and  environmentally  friendly.  The  Mission  consists  of  two  components. 
Component M3C1 aims at developing the Italian rail system by completing the main high-speed 
and high-capacity rail lines both in the North and the South of the country, completing the TEN-
T Core Network Corridors, integrating them with the regional rail network, enhancing the safety 
and  efficiency  of  the  entire  rail  network  and  strengthening  the  connection  of  key  metropolitan 
nodes, including the modernisation of a number of rail stations. A very important element of the 
deployment of 3 600 km of the European Rail Traffic Management System (ERTMS) to ensure 
full interoperability with the other systems in the EU in line with the ERTMS deployment map. 
The main objective is to support modal shift from road and air to rail, increasing rail capacity and 
connectivity and improving the quality of service along key national  and regional connections, 
including  by  strengthening  cross-border  connections.  Component  M3C2  sets  a  number  of 
reforms  to  make  intermodality  and  integrated  logistics  more  competitive  and  simplify  the 
implementation  of  projects  in  Italian  ports  through  the  updating  of  port  planning  and  the 
competitive  allocation  of  concessions.  It  provides  for  some  investments  to  make  ports  more 
environmentally  friendly  and  resilient  to  climate  change  and  to  support  the  modernisation  and 
digitalisation of the logistics system. This component also envisages actions for the digitalisation 
of the air traffic management system and the competitive allocation of concessions.  

Mission  4  (education  and  research)  aims  at  the  achievement  of  a  knowledge-intensive, 
competitive  and  resilient  economy.  In  line  with  the  European  Semester,  the  plan  focuses  on  the 
continuum between education and research capacities. Component M4C1 includes a comprehensive 
set  of  actions,  including  a  reform  agenda  that  concerns  the  whole  education  cycle,  from  early 
education  to  higher  education,  including  the  teaching  profession.  It  also  envisages  investments 
for the upskilling of school staff, upgrading of educational infrastructures and measures to bring 
PhD  skills  closer  to  concrete  needs  of  firms  and  institutions.  Component  M4C2  provides 
support  to  the  public  research  system,  researcher’s  skills  and  mobility,  as  well  as  business-

30 

 
 
 
 
academia cooperation at national  and EU  level  and research infrastructures.  It  is  built  on three 
main  pillars:  (i)  improved  science  base;  (ii)  strong  business-science  links  (knowledge  and 
technology  transfers);  (iii)  support  for  R&I  ecosystems  and  business  innovation  (notably 
innovative SMEs, start-ups and scale-ups). The proposed reforms concern a) the move to a more 
systemic  approach  to  R&D  activities,  through  a  new  simplified  model  aimed  at  generating  a 
significant impact through avoiding dispersion and fragmentation of priorities; b) the legislation 
to increase mobility of high-profile figures (i.e. researchers and managers) among Universities, 
Research infrastructures and companies; c) the simplification of funds management; d) the career 
path of non-tenure researchers. 

Mission 5 (inclusion and cohesion) aims at strengthening employment, social and territorial 
cohesion.  This  mission  is  built  around  three  components.  Component  M5C1  centers  on 
ALMPs, strengthening of public employment services, upskilling and reskilling initiatives. The 
envisaged actions mainly focus on gender equality (women’s enterprises and the gender equality 
certification  system)  and  on  young  people,  (the  dual  apprenticeship  system  and  the  universal 
civil service). A reform to tackle undeclared work is also outlined. Component M5C2 is aimed 
at  social  inclusion  with  actions  targeted  towards  vulnerable  and  disadvantaged  groups,  such  as 
people  with  disabilities  and  or  the  elderly.  It  addresses  major  social  vulnerabilities  in  terms  of 
material  poverty  and  housing  deprivation,  and  it  acknowledges  the  importance  of  urban 
regeneration  and  sport  to  foster  social  inclusion  and  integration.  Component  M5C3  includes 
interventions  for  the  resilience  of  internal,  peripheral  and  mountain  areas,  through  the 
strengthening of Inner Areas and projects for the development of the South, including investment 
for tackling education poverty, the enhancement of assets confiscated from the organised crime, 
reform and infrastructural investment in Special Economic Zones.   

Mission  6  (health)  aims  at  strengthening  proximity  services  and  digitalizing  the  national 
healthcare system. The aim of measures included in this Mission is to strengthen the response 
capacity  of  Italy’s  National  Health  Service,  with  a  view  to  responding  to  the  country’s 
demographic and epidemiological trends driving increasing demand for healthcare in an ageing 
population  and  to  improve  therapeutic  and  technological  innovation.  A  significant  amount  of 
resources  is  allocated  to  improve  infrastructure  and  technology  endowments,  promote  research 
and  innovation,  and  develop  the  technical,  professional,  digital  and  managerial  skills  of  the 
health  care  staff.  This  mission  is  built  around  two  components.  Component  M6C1  aims  at 
improving  the  governance  of  the  National  Health  System  and  enhancing  the  access  to  and 
support  provision  of  integrated  and  patient-centered  healthcare  and  continuity  of  care  at 
territorial level, close to citizens. Component M6C2 focuses on investments in the digitalization 
of  the  Health  Care  Systems  (measures  to  enhance  the  Electronic  Health  Record  and 
modernisation  of  the  e-health  systems  will  improve  efficiencies  in  the  health  sector)  and  the 
envisaged reform focuses on the reorganization of the network of Scientific Hospitalization and 
Care Institutes (IRCCS) by updating the rules in national regulations to review the legal regime 

31 

 
 
 
 
of  the  IRCCS.  The  investments  concern  the  development,  strengthening  and  modernization  of 
the technological and physical infrastructure of the national healthcare service and the research 
sector. 

Table 3.1 of components (grouped by mission) and associated costs 
Mission  

Mission 1 (digitalisation, 
innovation, competitiveness, 
culture and tourism) 

Mission 2 (green revolution 
and ecological transition) 

Mission 3 (infrastructures for 
sustainable mobility 

Mission 4 (education and 
research) 

Mission 5 (inclusion and 
cohesion) 

Mission 6 (health) 

Component 
M1C1. Digitalisation, innovation and 
security in the PA 
M1C2. Digitalisation, innovation and 
competitiveness in the production 
system 
M1C3. Tourism and culture 4.0 
M2C1. Circular economy and 
sustainable agriculture 
M2C2. Renewable energy, hydrogen, 
grid and sustainable mobility 
M2C3. Energy efficiency and 
renovation of buildings 
M2C4. Protection of land and water 
resources 
M3C1. Investments in the rail 
network 
M3C2. Intermodality and integrated 
logistics 
M4C1. Strengthening the provision 
of education services:from crèches to 
universities  
M4C2. From research to business 
M5C1. Employment policies 
M5C2. Social infrastructure, 
households, the community and the 
third sector  
M5C3. Special interventions for 
territorial cohesion 
M6C1. Local networks, facilities and 
telemedicine for local health care  
M6C2. Innovation, research and 
digitalisation of the national health 
service  
Total 

Costs (EUR million) 

9 722 

23 895 
6 675 

5 265 

23 778 

15 362 

15 054 

24 767 

630 

19 436 
11 440 
6 660 

11 216 

1 975 

7 000 

8 626 
191 499 

3.2. Implementation aspects of the plan  

The Recovery and Resilience Plan provides clear explanation of how it fits within the goals, 
priorities  and  policy  and  reform  recommendations  of  other  national  broad  plans.  The 

32 

 
 
 
 
 
Recovery and Resilience Plan is part of a broader development strategy, which is made up of an 
integrated set of funding sources and policy instruments. For instance, Italy has decided to set up 
a dedicated budget fund, with a total budget of around EUR 31 billion, to finance specific actions 
complementing  and  supplementing  the  Plan.  Through  the  Additional  National  Fund,  the  State 
supplements the ceiling of resources available to pursue the priorities and objectives of the Plan, 
taking into account specific parliamentary resolutions. 

The Recovery and Resilience Plan is linked to the National Energy and Climate Plan, which 
includes reforms and investments that will facilitate reaching climate and energy targets for 2030 
and paving the path towards climate neutrality by 2050. Notably, the “Green Transition” pillar of 
the Plan supports the transition towards a low-carbon energy system, with increased participation 
of  Renewable  Energy  Sources  in  energy  consumption,  improved  energy  efficiency  of  the 
domestic building stock, and a “greener” and more sustainable transport system.  

The Plan is consistent with the National Transport Strategic Plan, the Integrated National 
Transport System and in line with the European Flagship ‘Power Up’ and ‘Recharge and 
Refuel’,  as  it  acknowledges  the  importance  of  developing  modern,  sustainable,  accessible  and 
climate change resilient transport infrastructures. It acknowledges the enhancement of resilience 
against threats and risks of any kind as a crucial element of economic and societal development 
and progress. As a result, it incorporates the strategic guidelines, objectives and detailed targets 
to promote Energy Transition and Sustainable Mobility. 

The  Plan  is  broadly  aligned  with  the  objectives  and  priorities  presented  in  the  draft 
National  and  Territorial  Just  Transition  Plan.  The  “Green  Transition”  pillar  includes 
investments to improve waste management and reforming the circular economy model. Reforms 
on  waste  management  and  circular  economy,  if  well  implemented  and  accompanied  by  the 
strengthening  of  local  capacities  for  investment,  could  have  a  substantial  contribution  to 
cohesion and convergence as they aim at establishing national planning tools that would bridge 
the gap between different regions and improve the national average in achieving national and EU 
goals for the sector. The reforms and investments in the Plan address the green transition needs, 
also providing a much-needed boost to innovative elements of the transition, such as hydrogen, 
offshore  renewables,  and  storage.  Synergies  with  the  Just  Transition  Plan  are  only  broadly 
explored in the Plan for the case of hydrogen production. Other significant measures well aligned 
with  EU  transition’s  priorities  include:  improvement  of  the  agri-food  chain  sustainability,  the 
creation  of  green  communities,  the  increase  in  the  share  of  energy  produced  by  Renewable 
Energy  Sources  (RES),  the  improved  performance  of  the  electricity  grid,  the  promotion  of 
alternative  fuels  and  smart  mobility,  and  encouragement  of  reduction  of  polluting  modes  of 
transport.  These  actions  are  expected  to  create  new  jobs  for  the  local  workforce,  as  well  as  a 
range of novel growth opportunities. 

33 

 
 
 
 
 
 
is  also  expected  to  operate 

in  consistency, 
The  Recovery  and  Resilience  Plan 
complementarity,  and  cooperation  with  the  new  Italian  Partnership  Agreement  for  the 
2021-2027 of the European Structural and Investment Funds, and its operational programs. 
The  Plan  is  expected  to  be  consistent  with  the  objectives  and  priorities  of  the  new  Partnership 
Agreement,  which  is  still  under  negotiation  with  the  Italian  authorities.  Synergies  among 
different instruments are expected to avoid a duplication of effort and lead to a simplification of 
planning, management and implementation  of EU support in  Italy. As envisaged under Decree 
Law  of  31  May  2021  n.77,  central  administrations  responsible  for  the  implementation  of 
measures  of  the  Recovery  and  Resilience  Plan  can  provide  support  on  monitoring  and 
coordination  of  national  and  EU  programmes,  including  European  Structural  and  Investment 
Funds  that  are  implemented  mainly  through  regional  programs.    Along  with  the  Common 
Agricultural Policy, Horizon and Connecting European Facility, the three instruments contribute 
to the bulk of investment funds to be deployed in the Italian economy in the following years.  

The  missions  on  the  ‘Green  Revolution  and  Ecological  Transition’,  ‘Digitalisation, 
Innovation of the Public Administration and Business Competitiveness’, and ‘Inclusion and 
Cohesion’  comprise  investments  and  reforms  which  contribute  directly  and  indirectly  to 
job creation and to enhancing youth employment. Reforms  and investments  included in  the 
“employment  policy”  component,  aim  at  increasing  long-term  employment,  employability  and 
labour  productivity  through  labour  market  reforms,  modernising  active  labour  market  policies 
(including  measures  targeted  to  the  young  unemployed  individuals  and  women),  strengthening 
vocational  training,  increasing  up/re-skilling  services,  and  building  capacity  for  the  Public 
Employment Service. These reforms and investments are related to the goals and priorities of the 
National  Youth  Guarantee  Implementation  Plan,  and  complement  its  activities,  while  they  are 
expected  to  operate  as  complements  in  mitigating  the  employment  and  social  impact  of  the 
COVID-19 pandemic. 

Overall,  the  plan  is  consistent  with  the  main  challenges  and  priorities  identified  in  Draft 
Council Recommendation on economic policy of the euro area.46 The Italian NRRP addresses 
EAR  1  by  strengthening  the  coverage,  adequacy,  and  sustainability  of  the  health  system.  A 
number  of  measures  are  envisaged  to  reinforce  local  health  care  facilities,  fostering  the  digital 
transition  throughout  the  health  system  and  use  health  data  to  assess  the  quality  of  care  and 
support  health  care  decisions  and  planning  for  improving  the  governance  of  the  healthcare 
system.  The  Italian  NRRP  also  envisages  a  set  of  structural  reforms  to  improve  the  business 
environment by simplifying the public procurement system, reforming local public service, and 

46  Pending  final  adoption  by  the  Council,  after  endorsement  by  the  European  Council.  The  text  agreed  by  the 
Eurogroup  on  16  December  2020  is  available  at: https://data.consilium.europa.eu/doc/document/ST-14356-2020-
INIT/en/pdf”. 

34 

 
 
 
 
                                                 
 
removing  barriers  to  competition.  These  actions,  combined  with  the  efforts  to  revise  public 
expenditure,  would  contribute  to  increase  EU  funds  absorption  and  improve  public  financial 
management,  in  line  with  EAR  1.  The  Italian  plan  would  also  address  EAR  2  with  significant 
measures that aim at enhancing the green transformations of the Italian economy, by improving 
energy  efficiency  and  building  renovation,  promoting  renewables  and  hydrogen  production  as 
well  as  fostering  circular  economy  and  better  agricultural  practices.  These  measures  are  also 
expected  to  contribute  to  the  achievement  of  the  European  Green  Deal  and  to  promote  the 
Europe’s  economic  interests  (EAR5).  Moreover,  a  number  of  measures  are  also  envisaged  to 
contribute to the green and digital transition, to improve labour market participation, particularly 
for women and young people, and to enhance the quality of the education and training services. 
A relevant set of reforms and investments would address EAR 3 by increasing the effectiveness 
of  the  public  administration,  the  efficiency  of  the  justice  system  and  the  resilience  of  the 
healthcare system. Moreover, concerning the business environment, the Plan includes measures 
to remove barriers to competition, improve regulation in certain sectors and streamline the public 
procurement  code.  The  Plan  also  includes  measures  to  reinforce  the  insolvency  framework, 
potentially positively impacting the banking sector balanced sheets (EAR 3 and EAR 4). These 
measures  are  expected  to  contribute  to  mitigate  the  effects  of  the  crisis,  preventing  the 
accumulation of non-performing loans on bank balance sheets. This is turn will allow banks to 
continue providing credit to the economy and supporting economic growth. 

A  multi-level  governance  is  envisaged  for  the  implementation  and  the  monitoring  of  the 
Plan.  This  includes  in  particular:  at  political  level,  a  steering  committee  established  at  the 
Presidency  of  the  Council  of  Ministers;  at  social  dialogue  level,  a  consulting  body  involving 
representatives  of  regional  and  local  authorities,  social  partners  and  relevant  stakeholders;  at 
technical  level,  notably  a  central  coordination  and  monitoring  structure  established  at  the 
Ministry of Economy and Finance and a technical secretariat established at the Presidency of the 
Council of Ministers to support the activities of the steering committee and the consulting body. 
In  addition,  technical  coordination  structures  will  be  identified  at  the  level  of  central 
administrations  responsible  for  the  measures  under  their  remit.  The  strengthening  of 
administrative capacity, including through the provision of technical support to administrations 
and the temporary recruitment of experts, and the simplification of administrative procedures are 
envisaged  with  the aim to ensure a timely  and  effective implementation and monitoring of the 
plan.  The  model  also  provides  for  the  establishment  of  an  independent  Audit  Body  for  the 
implementation  of  internal  control  systems.  The  competences  and  mandates  of  the  relevant 
bodies,  the  simplification  of  administrative  procedures  and  the  strengthening  of  administrative 
capacity have been defined in two legal acts adopted by the Italian government (Decree Law of 
31 May 2021, n. 77 and Decree Law of 9 June 2021, n. 80). In addition, technical support may 
be  requested  under  the  Technical  Support  Instrument  to  assist  Member  States  in  the 
implementation of their plan. 

With  regard  to  gender  equality  and  equal  opportunities  for  all,  the  plan  has  a  dual 
approach  of  responding  to  the  consequences  of  the  pandemic  and  addressing  structural 

35 

 
 
factors leading to inequalities. The Plan describes how the measures are expected to contribute 
to overcoming the national challenges identified in terms of gender equality but also in terms of 
equal opportunities for some groups. This is in particular the case for younger persons, but it also 
concerns  other  groups  in  situation  of  vulnerability,  such  as  the  older  people  and  persons  with 
disabilities. The plan aims at investing in nurseries, preschool and early childhood education and 
care services to facilitate labour market participation of women. To gear the implementation of 
the  Plan  towards  its  equality  objectives,  the  Italian  authorities  have  introduced  anticipating 
mechanisms, such as equality-driven criteria in calls for tenders and made the funding of projects 
conditional on the recruitment of young people and women. 

The development of the Plan included the consultation of a variety of stakeholders, which 
are set to be involved also in the implementation phase. The Plan went through a process of 
consultation  and  interaction  with  a  variety  of  stakeholders,  including  regional  and  local 
authorities,  civil  society  organizations,  social  partners  and  academics  and  policy  experts. 
Following  the  opinion  of  the  Italian  Parliament  on  the  strategic  guidelines  proposed  by  the 
government for the drafting of the Plan, a first version was approved by the Council of Ministers 
on 12 January 2021. After the change of government in February 2021, the examination of the 
draft plan and the consultations with relevant stakeholders continued. The Chamber of Deputies 
and the Senate held a series of hearings involving a variety of stakeholders such as regional and 
local authorities, social partners, civil society organisations and institutional bodies and approved 
ad  hoc  reports  thereon,  together  with  resolutions  steering  the  finalisation  of  the  plan  on  that 
basis.  Furthermore,  the  government  itself  held  a  dialogue  with  regional  and  local  authorities 
within the framework of the State-Regions  Conference. As a  result of this  process,  the revised 
Plan  was  presented  to  Parliament,  which  acknowledged  that  the  government  took  into  account 
the  indications  provided  by  the  Chambers  and  endorsed  the  transmission  to  the  Commission. 
With regard to the consultation process in the implementation phase, the Italian Plan envisages to 
continue  regular  dialogues  with  the  various  administrations  involved  in  the  implementation  of 
the plan and with stakeholders. To this effect, the governance model envisages the creation of a 
consulting  body  with  the  participation  of  economic  and  social  partners  and  other  relevant 
stakeholders,  as  defined  in  a  legal  act  adopted  by  the  government  at  the  end  of  May  2021 
(Decree Law of 31 May 2021, n. 77).  

Security self-assessment 

In accordance with Article 18(4)(g) of the RRF Regulation, the plan includes a security-self 
assessment  for  investments  related  to  cloud  services  and  infrastructures  for  the  public 
administration.  As  regards  connectivity  measures,  in  particular  for  5G  deployment,  Italy 
confirmed  that  it  will  carry  out  such  an  assessment  at  a  later  stage,  taking  into  account  the 
connectivity scenarios that will result from the mapping and public consultation exercises. In this 
regard,  Italy  stated  that  it  will  analyse  risk  scenarios  and  implement  measures  to  avoid  or 
mitigate  any  potential  security  risks.  Strategic  measures  mentioned  in  the  security  self-
assessment would need to be closely monitored during the implementation of the plan. 

36 

 
 
Cross-border and multi-country projects  

The Plan includes several cross-border and multi-country projects, notably in the areas of 
transport,  energy  and  digital.  The  Plan  strengthens  Italy’s  rail,  e-mobility  and  5G  corridors, 
reinforcing  interconnections  with  other  Member  States.  By  ensuring  the  deployment  of  the 
European Rail Traffic Management System throughout the Italian railway network and removing 
infrastructure bottlenecks in important nodes, the Plan will enable the development of seamless 
railway  freight  connections  with  other  Member  States  along  the  TEN-T  corridors.  The  Plan 
envisages notably to  invest in  the rail connection between Verona and the Brenner, facilitating 
railway  freight  between  Italy  and  Germany  in  the  Scandinavian-Mediterranean  corridor.  The 
Plan  also  envisages  improved  connections  between  important  container  ports  like  Genoa  and 
Gioia Tauro and the rest of the Single Market, through important investments in the Liguria-Alpi 
and  Salerno-Reggio  Calabria  lines.  Furthermore,  the  Plan  also  envisages  to  deploy  charging 
stations  along  Italian  highways,  facilitating  e-mobility  on  long  distances  in  line  with  the 
Recharge and Refuel flagship. In addition, the Plan envisages the deployment of optical fiber and 
5G  based  technologies  along  the  European  5G  corridors  to  facilitate  the  introduction  of 
autonomous  driving  and  the  creation  of  new  value-added  services.  Finally,  some  transnational 
elements are also present in certain initiatives supporting research and innovation (e.g. as regards 
approved  and  potential  Important  Projects  of  Common  European  Interest  (IPCEIs),  or  R&I 
partnerships in the context of Horizon Europe). 

The  Plan  will  contribute  to  the  achievement  of  the  objectives  of  the  new  Industrial 
Strategy47  for  fostering  the  twin  transition,  making  EU  industry  more  competitive  and 
enhancing Europe’s open strategic autonomy. In particular, it is worth noticing the support to 
approved  and  potential  IPCEIs,  key  investments  in  EU  strategic  value  chains  in  batteries, 
hydrogen and electric mobility, and public-private research partnerships. The Plan provides for 
the strengthening of the financial endowment of the "IPCEI Fund", which can support companies 
that participate in approved and potential IPCEIs undertaken in all areas of strategic intervention 
and value chains identified by the European Commission. Italy is already participating in the two 
IPCEIs  on  batteries  and  on  micro-electronics.  In  the  Plan,  Italy  underlines  its  intention  to 
participate in the potential second IPCEI on micro-electronics and on the potential one on Next 
Generation  Cloud  Infrastructure  and  Services,  in  two  potential  hydrogen  IPCEIs  and  also  in 
potential  IPCEIs  on  raw  materials  and  health.  The  Plan  also  envisages  to  invest  in  the 
development of Italian value chains in hydrogen, batteries and e-mobility. Furthermore, the Plan 
also  envisages  to  support  the  participation  of  Italian  firms  to  Horizon  Europe  partnerships  in 
High-Performance  Computing,  Key  Digital  Technologies,  Blue  Ocean  and  Innovative  SMEs. 
Finally,  the  Plan  envisages  investments  in  the  space  economy  that  will  complement  Italy’s 

47 COM(2021) 350 final, https://ec.europa.eu/info/sites/default/files/communication-new-industrial-strategy.pdf 

37 

 
 
                                                 
 
participation to EU space policy. Other investments with a cross-border dimension include: the 
measures  to  strengthen  the  network  of  European  Digital  Innovation  Hubs  (EDIHs)  under 
Component M4C2, and the possible development of cross-border cooperations to strengthen the 
offer of specialised education and training in digital domains (Component M4C1).  

Additionally,  the  Plan  also  envisages  to  invest  in  the  implementation  of  the  Single  Digital 
Gateway in Italy, allowing the cross-border exchange of data for the benefits of businesses and 
citizens. 

Communication strategy  

The Plan envisages a broad communication strategy aimed at informing  stakeholders and 
the  general  public  of  the  measures  included  in  the  Plan  and  the  results  achieved,  to  be 
implemented also in coordination with the EU institutions as a joint communication effort. The 
strategy  clearly  identifies  main  objectives  and  target  groups,  which  encompass  both  potential 
beneficiaries  of  RRF  funds  as  well  as  the  wider  public,  with  the  individuation  of  categories 
considered as particularly strategic (enterprises, media, students). The strategy builds on a set of 
identified  communication  channels,  including  an  online  portal  dedicated  to  the  Plan  and  its 
implementation  that is intended to  support communication activities to  the wider public and to 
enhance  transparency  in  the  monitoring  of  projects  execution.  It  is  also  envisaged  that  annual 
communication  plans  will  be  prepared,  detailing  strategic  priorities,  activities  (actions,  targets, 
channels), planned budget, and monitoring and evaluation activities. The recognition of adequate 
visibility to the role of the European Union in the financing is to be pursued in accordance with 
Article 34 of Regulation 2021/241 of the European Parliament and of the Council.  

State aid 

State  aid  and  competition  rules  fully  apply  to  the  measures  funded  by  the  Recovery  and 
Resilience Facility. Union funds channelled through the authorities of Member States, like the 
RRF funds, become State resources and can constitute State aid if all the other criteria of Article 
107(1)  TFEU  are  met.  When  this  is  the  case  and  State  aid  is  present,  these  measures  must  be 
notified and approved by the Commission before Member States can grant the aid, unless those 
measures are covered by an existing aid  scheme or comply  with  the applicable conditions  of a 
block  exemption  regulation,  in  particular  the  General  Block  Exemption  Regulation  (GBER) 
declaring certain categories of aid compatible with the internal market in application of Articles 
107 and 108 TFEU48. When State aid is present and it requires notification, it is the duty of the 
Member  State  to  notify  State  aid  measures  to  the  Commission  before  granting  them,  in 
compliance with Article 108(3) TFEU. In this respect, the State aid analysis carried out by Italy 
in the recovery and resilience plan cannot be deemed a State aid notification.  In as far as Italy 
considers that a specific measure contained in the recovery and resilience plan entails de minimis 

48 Commission Regulation 651/2014, OJ L 187, 26.6.2014, p. 1. 

38 

 
 
                                                 
aid or aid exempted from the notification requirement, it is the responsibility of Italy to ensure 
full compliance with the applicable rules. 

Irrespective of whether they comply with the EU’s State aid regime, measures taken under this 
framework  should  be  compatible  with  the  EU’s  international  obligations,  in  particular  under 
World Trade Organization rules. 

4.  SUMMARY OF THE ASSESSMENT OF THE PLAN 

4.1. Comprehensive  and  adequately  balanced  response  to  the  economic  and  social 

situation  

The Plan presents to a large extent a comprehensive and adequately balanced response to 
the  economic  and  social  situation,  thereby  contributing  appropriately  to  all  six  pillars 
referred  to  in  Article  3  of  the  RRF  Regulation.  The  Plan  follows  a  holistic  approach  to 
achieve  recovery  and  increase  potential  growth,  while  enhancing  socio-economic  and 
institutional  resilience.  Overall,  the  Plan  focuses  on  the  twin  transition  and  Italy’s  main 
challenges, including those related to social and territorial disparities. 

Table 4.1. Coverage of the six pillars of the Facility by the Italian RRP components. 

Green 
transition 

Digital 
transformation 

Smart, 
sustainable, 
inclusive 
growth 

Social & 
territorial 
cohesion 

Policies for 
next 
generation 

Health, 
economic, 
social and 
institutional 
resilience 

● 
○ 

● 

●  
● 
● 

● 
● 
○ 
○ 
○ 

○ 
○ 
○ 
● 
● 
● 
● 
● 
○ 
● 
● 

M1C1  
M1C2  
M1C3 
M2C1 
M2C2 
M2C3 
M2C4 
M3C1 
M3C2 
M4C1 
M4C2 
M5C1 
M5C2 
M5C3 
M6C1 
M6C2 
Key: “●”component significantly contributes to the pillar; “○” component partially contributes to the pillar 

● 
● 
● 
● 
● 
● 
● 
● 
● 
● 
● 
● 
● 
● 

○ 
● 
○ 
● 
● 
● 
○ 

● 
○ 
● 
● 
● 

● 
● 
● 
● 
● 

● 
● 
● 
● 
● 

○ 
○ 
○ 
○ 

● 
● 

○ 
● 

● 

○ 

○ 

● 
● 
● 

● 

Green transition  

39 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The  Italian  RRP  includes  37,5%  of  expenditure  related  to  the  green  transition.  The  Plan 
includes a number of measures related to  energy efficiency, in particular through a scheme for 
building renovations but it also envisages direct investments to improve the energy efficiency of 
public buildings. Italy also intends to use the Facility to boost the production of clean hydrogen 
in line with the flagship projects Power Up and Refuel and Recharge and to increase the share of 
renewables  in  transport  and  heating,  in  particular  through  the  development  of  bio-methane. 
Reforms, such as to facilitate the authorisation of renewable power production, are also included 
to  support  the  green  transition.  The  Plan  also  focuses  on  reducing  GHG  emissions  from 
transport: it envisages important investments in sustainable urban mobility, including e-mobility, 
is set to boost railway infrastructure to support modal shift and to reduce GHG emissions in air 
and maritime transport. The Plan also aims at reducing emissions in the agriculture sector. The 
Plan also supports Italy’s climate adaptation efforts, as well as seismic resilience and the quality 
of  infrastructures  and  it  addresses  the  existing  challenges  on  circular  economy  and  waste 
management,  water  supply  and  wastewater  management  and  biodiversity  protection.  The 
contribution  to  the  green  transformation  pillar  provided  by  the  different  measures  contained  in 
the Plan is explained in detail in Section 4.5 below. 

Digital transformation  

The  plan  dedicates  25%  of  the  financial  allocation  to  the  digital  transformation.  The 
measures in the plan focus especially on the digital transformation of the public administration 
and justice system, the strengthening of the health care system through digital technologies, the 
modernisation of businesses through the uptake of advanced technologies (Transition 4.0) and on 
fostering  gigabit  connectivity  across  the  country.  The  reforms  and  investments  contribute  to 
address digital skills development, with measures aimed at improving the basic digital skills of 
the general population, increasing the offer of training on advanced digital skills, and upskilling 
and  reskilling  of  the  workforce  (including  public  sector  employees).  The  contribution  to  the 
digital transformation pillar provided by the different measures contained in the Plan is explained 
in detail in Section 4.6 below.  

Smart,  sustainable  and  inclusive  growth,  including  economic  cohesion,  jobs,  productivity, 
competitiveness, research, development and innovation, and a well-functioning internal market 
with strong SMEs  

Investments in the plan have the potential to enhance productivity and foster sustainable 
growth.  First  of  all,  the  Plan  contains  a  series  of  reforms  and  investments  aimed  at 
increasing the capacity of the country to attract investments and to create new businesses 
and jobs. The annual competition laws will remove long-lasting barriers to entry in a variety of 
strategic  sectors,  making  them  more  contestable  and  dynamic.  The  reform  is  also  expected  to 
reduce the  time  needed  to  start  a  business  in  Italy,  to  award  contracts  in  local  public  services 

40 

 
 
 
 
 
 
 
based  on  a  more  competitive  process  and  to  reduce  late  payments  (arrears)  by  the  public 
administrations. The  simplification  of  public  procurement  rules  and  the  reform  of  the  Public 
Administration  will  reduce  the  red  tape  for  the  realisation  of  public  projects  as  well  as  the 
unnecessary  regulatory  hurdles  faced  by  businesses.  Overall,  the  enhanced  competitive 
environment and the leveling of the playing field is expected to favour entrepreneurship, a more 
efficient  allocation  of resources  and  therefore  improving  the  overall  welfare.  Furthermore,  the 
measures  focused  on  the  justice  system,  including  the  reduction  of  the  length  of  judicial 
proceedings  and  the  reorganisation  of  the  Trial  Office  at  courts,  will  enhance  legal  certainty, 
which is often perceived as one of the main obstacles for doing business in Italy. The reform of 
the insolvency proceedings will also facilitate the de-risking of bank balance sheets and prevent 
the accumulation of new non-performing loans on bank’s credit portfolios. 

Secondly, Small- and Medium-sized Enterprises (SMEs) will significantly benefit from the 
measures  contained  in  the  Plan.  While  the  reforms  described  above  are  addressed  to  all 
economic activities in Italy, SMEs, often lacking sufficient resources and staff to cope with the 
complexity  and  slowness  of  authorisations  and  administrative  procedures,  will  largely  benefit 
from  the  simplification  and  streamlining  of  Italian  bureaucracy.  For  instance,  reducing  the 
administrative burden attached to national incentives for energy efficiency renovations can make 
them more accessible and attractive to SMEs. The Plan also brings in efforts for digitalisation, 
which  are  likely  to  benefit  SMEs.  Measures  for  the  development  of  digital  skills  are  to  some 
extent part of the national plan ‘Transition 4.0’, including the tax credit for ‘Training 4.0’, which 
will provide an opportunity for SMEs to increase their digital capacities. The increase in the level 
of SMEs’ technological capabilities will also be achieved through enhanced knowledge-sharing 
(e.g.  through  Digital  Innovation  Hubs).  Component  M1C1,  finally,  also  foresees  financial 
support  to  promote  the  development  of  firms  (including  SMEs)  operating  in  strategic  value 
chains,  and  to  increase  the  competitiveness  of  companies,  for  instance  by  supporting 
internationalisation processes.  

Thirdly,  the  Plan  pays  due  consideration  to  the  importance  of  boosting  research, 
development and innovation activities, by providing support to the public research system, the 
business-academia cooperation (also including through knowledge and technology transfer), the 
access  to  research  infrastructures,  and  supporting  the  R&I  ecosystems  for  innovative  SMEs, 
start-ups  and  scale-ups.  During  the  implementation  of  the  plan,  sectoral  support  from  the 
Horizon Policy Support  Facility for the design, implementation  and evaluation of research  and 
innovation policy reforms will be available to increase the quality and effectiveness of the RRF 
supported investments. 

Finally,  the  Plan  includes  measures  to  increase  the  efficiency  and  fairness  of  the  labour 
market  and  to  contribute  to  the  European  Pillar  of  Social  Rights.  The  Plan  foresees  a 
comprehensive  reform  of  active  labour  market  policies  (ALMPs)  and  vocational  training,  by 
defining  essential  levels  of  training  for  the  most  vulnerable  groups.  The  Plan  boosts  the 
participation of women (e.g. with measures to support the creation of enterprises by women and 
with investments in nurseries). Young people’s integration in the labour market is also supported 

41 

 
 
 
 
 
through  e.g.  enhancing  the  “Universal  Civil  Service”  initiative  and  strengthening  the  dual 
systemand  through  reforms  aimed  at  reducing  undeclared  work.  The  Plan  addresses  the 
vulnerabilities identified by the Social Scoreboard and provides a detailed mapping of selected 
interventions to the criteria of the Social Scoreboard (see section 4.3 below). 

Social and territorial cohesion  

The Plan includes investments and reforms to strengthen the active inclusion of vulnerable 
groups. The measures in the Plan focus on strengthening Active Labour Market Policies with a 
special  focus  on  vulnerable  groups  of  the  population  who  face  more  difficulties  entering  the 
labour  market.  It  also  aims  to  enhance  the  provision  of  public  services  and  social  housing 
opportunities for the low-income groups and also to disadvantaged groups with specific projects 
for instance for people with disabilities, for youth and for the non-self-sufficient elderly and to 
improve  the  regeneration  and  affordable  housing,  and  promoting  the  culture  of  sport,  also  by 
incentivising the recovery of sports infrastructures through the creation of urban parks.  

to 

infrastructural 

addressing the 

The  Plan  also  aims  to  reduce  territorial  disparities.  It  allocates  at  least  40%  of  investment 
with a specific territorial destination to Southern regions (against a national requirement of 34%). 
In particular, it contributes 
at 
enhancing the productivity  and  competitiveness  of  lagging  regions  in broadband,  high-speed 
railways  and  regional  lines,  waste,  water  and  wastewater  management infrastructure,  ports  and 
“last  mile”  connections  in  the  Special  Economic  Zones.  In  addition,  the  Plan  includes 
interventions  to  improve  access  to  basic  services  in  rural  and  remote  areas,  and  a  set  of 
interventions to address urban degradation, including investment for tackling education poverty 
and the enhancement of asset confiscated from the organised crime. The plan also pays particular 
attention to the less developed regions in a set of measures aimed at tackling education poverty, 
strengthening social services and tackling important problems in deprived urban areas. 

and it 

aims 

gap 

Health, and economic, social and institutional resilience, with the aim of, inter alia, increasing 
crisis preparedness and crisis response capacity  

The plan includes investments and reforms aimed at improving the health, and economic, 
social and institutional resilience. In the area of healthcare, the plan includes measures aimed at 
increasing the resilience of the healthcare system, by strengthening its coverage, adequacy, and 
sustainability  also  in  view  of  the  increasing  demand  for  healthcare  related  to  the  ageing 
population,  and  to  improve  research  development,  therapeutic  and  technological  innovation. 
Also,  a  number  of  measures  are  envisaged  to  reinforce  telemedicine  and  local  health  care 
facilities, improving the governance of the healthcare system and boost disease prevention and 
health promotion. The plan presents a comprehensive set of measures to address labour market 
deficiencies and to strengthen social and territorial cohesion. Finally, the comprehensive reforms 
concerning  sectors  of  the  public  sector  will  increase  the  effectiveness  and  efficiency  of  the 

42 

 
 
 
 
 
 
 
institutions.  Particularly,  the  public  administration  is  expected  to  be  more  effective  and 
responsive  to  firms  and  citizens  thanks  to  reform  of  the  recruitment  system,  significant 
investment  in  digitalisation  and  strengthened  administrative  capacity,  especially  at  local  level. 
The  length  of  civil  and  criminal  proceedings  is  expected  to  be  reduced  thanks  to  gains  in  the 
justice system efficiency. Overall, the efficiency and resilience of Italian institutions are expected 
to benefit from the set of reforms and investment of the national RRP.  

Policies for the next generation, children and the youth, such as education and skills  

in 

regional  disparities 

terms  of  schooling 

The Plan also includes investments and reforms to boost the quality of education (and hence 
of  human  capital)  allowing  for  equal  education  opportunities  across  the  country,  significantly 
reducing 
infrastructure  and  educational 
outcomes. Southern regions are expected to significantly benefit from the envisaged investments 
in sport  facilities, nurseries  and  student  housing  and  from  the  increased  number  of  university 
scholarships  as  well  as  from  targeted  projects  to  reduce  early-school  leaving  and  increase 
education  outcomes  of  vulnerable  pupils. Measures  such  as  the  modernisation  of  technical  and 
professional upper secondary education, the reform and expansion of the tertiary non-academic 
sector (ITS) and the improvement of orientation  services to boost the transition from school to 
higher  education  could  help  improve  young  people’s  educational  attainment  as  well  as  their 
employment prospects. 

Taking  into  consideration  all  reforms  and  investments  envisaged  by  Italy,  its  Recovery  and 
Resilience plan represents, to a large extent a comprehensive and adequately balanced response 
to the economic and social situation, thereby contributing appropriately to all six pillars referred 
to in Article 3 of the RRF Regulation, taking the specific challenges and the financial allocation 
of  Italy  into  account.  This  would  warrant  a  rating  of  A  under  the  assessment  criterion  2.1  in 
Annex V to the RRF Regulation. 

4.2. Link with country-specific recommendations and the European Semester  

The  Plan  is  expected  to  address  a  significant  subset  of  the  relevant  country-specific 
recommendations  issued  to  Italy  both  in  2019  and  2020.  The  reforms  and  investments 
envisaged are ambitious and have the potential to structurally tackle long-standing challenges of 
the economy. Notably, the most relevant challenges for the Italian economy concern the complex 
and  inefficient  tax  system,  the  inefficiencies  of  the  labour  market,  characterised  by  high 
unemployment  and  low  women’s  participation.  Challenges  persist  in  human  capital  formation, 
with  weak  educational  outcomes and limited adult learning. The public  administration remains 
ineffective  and  suffers  from  weak  administrative  capacity,  particularly  at  local  level. 
Inefficiencies  affect  the  justice  system,  hindered  by  a  significant  backlog  of  cases  and  very 
lengthy proceedings, thus weakening the fight against corruption and weighing on the business 
environment.  The  latter  remains  not  sufficiently  supportive  for  businesses,  with  remaining 

43 

 
 
 
 
 
 
barriers  to  competition  to  be  removed  and  specific  regulations  to  be  improved,  particularly 
concerning public procurement and concessions, limited authorisations and local public services. 
The  quality  of  infrastructure  needs  to  be  upgraded  while  research  and  innovation  further 
supported. This is particularly true for Souther regions that lag behind in terms of productivity 
and  competitiveness  due  to  the  relevant  gap  of  infrastructure  and  innovation.  Pockets  of 
vulnerabilities  remain  for  the  banking  sector  while  the  subdued  non-banking  access  to  finance 
for  firms,  particularly  SMEs  and  innovative  firms,  leave  them  excessively  dependent  on  the 
banking system.   

The Plan includes relevant fiscal-structural reforms that are expected to contribute to the 
sustainability  of  public  finances.  Several  reforms  are  expected  to  help  reducing  tax  evasion, 
including the strengthened capacity of the tax authority in terms of staff, analytical infrastructure 
and  data  access,  the  deployment  of  pre-filled  VAT  tax  returns  as  well  as  the  introduction  of 
effective  sanctions  for  the  refusal  of  electronic  payments.  In  addition,  the  Plan  includes  the 
commitment to review possible actions for fighting tax evasion in the most exposed sectors and 
to take effective action on that basis. A comprehensive reform of personal income taxes is also 
mentioned  in  the Plan, whereby  the  Italian  authorities  express  the  intention  to  simplify  the  tax 
system and reduce the burden on labour while preserving progressivity and fiscal sustainability. 
This  reform  is  not  included  as  a  measure  in  the  Plan  and  thus  not  associated  to  deliverables 
(milestone  or  target)  under  the  Recovery  and  Resilience  Facility.  On  the  expenditure  side,  the 
Plan includes a reform of the spending review process, in order to enhance its effectiveness and 
to  support  green  and  gender  budgeting,  as  well  as  the  commitment  to  implement  three  yearly 
spending  reviews  over  2023-2025.  The  introduction  of  an  accrual  accounting  system  for  all 
public administrations is also expected to support a better monitoring of public finances. Finally, 
the  completion  of  the  fiscal  federalism  reform  is  set  to  improve  fiscal  relations  among  the 
different levels of government, by allocating resources based on objective criteria and encourage 
spending efficiency at the subnational level. Overall, these measures are expected to reduce the 
revenue-loss from tax evasion and to improve the efficiency of public expenditure in the medium 
term, contributing to improve fiscal sustainability. 

The Plan includes a set of reforms and investments in the health sector aimed at ensuring 
greater resilience of the healthcare service. Particularly, the envisaged reforms and investment 
are  expected  to  improve  the  effectiveness  and  the  equality  of  the  health  system  by  fostering 
improvements  for  a  balanced  and  proportionate  territorial  healthcare  assistance  and  the 
integration  of  care  services.  The  actions  would  strengthen  proximity  networks  and  facilities, 
home  care  and  telemedicine  for  territorial  healthcare  assistance,  review  the  organisation, 
technological  and  quality  standards  of  territorial  care  and  proximity  health  care,  boost  disease 
prevention  and  health  promotion,  through  the  definition  of  a  new  institutional  network. 
Moreover,  the  Plan  envisages  the  review  of  the  legal  regime  and  the  reorganization  of the 
network  of  Scientific  Hospitalization  and  Care  Institutes  (IRCCS)  to  support  research  and 

44 

 
 
 
  
strengthen the responsiveness of the Italian NHS to health emergencies and demographic trends, 
as well as improve the relations between the NHS and universities. Significant investments are 
envisaged to develop, strengthen and modernise the technological and physical infrastructure of 
the national healthcare service and the research sector, 
,  increasing  the  number  of  doctors  in  primary  care  specialization  and  developing  knowledge 
(professionals  in  the  NHS)  and  fostering  managerial  skills  (professionals  in  governance, 
coordination  and  decision-making).  Overall,  the  Italian  NRRP  is  expected  to  significantly 
contribute to improving the resilience of the Italian health system. 

The  Plan  includes  measures  contributing  to  increase  the  efficiency  and  fairness  of  the 
labour market, by improving the effectiveness of ALMP, boosting participation of women and 
young  people  to  the  labour  market  and  by  launching  new  initiatives  for  fighting  against 
undeclared work. Unemployed workers and workers in transition are expected to be supported by 
the  establishment  of  the  “National Programme for  the  Guaranteed  Employability  of  Workers”, 
the adoption of the National Plan for New Skills to define uniform standards and essential levels 
of  vocational  training,  and  investment  to  strengthen  the  public  employment  services 
(PES). Measures  to  support  the  creation  of  women’s  enterprises  and  investment  in  nurseries 
would contribute to raise the level of women’s participation in the labour market. This would be 
further supported by the introduction of a "National gender equality certification system", based 
on the definition of standards for the  certification of gender  equality and related incentives for 
companies  that  successfully  conclude  the  certification  process.  The  plan  includes  measures  to 
step  up  the  fight  against  undeclared  work,  illegal  recruitment  and  contribution  evasion.  When 
implemented,  the  measures  on  undeclared  work  are  expected  to  strengthen  the  detection  and 
sanctioning of irregular working practices, to encourage workers and employers to declare work 
by  making  it  easier  to  comply  with  actions  such  as  the  simplification  of enrolment  procedures 
and  tax  arrangement.  These  measures  will  also  be  coupled  with  actions  to  increase  awareness 
about  the  importance  of  “playing  by  the  rules”,  including  by  demonstrating  the  cumulative 
financial and social costs and consequences for the whole society of the undeclared work. Would 
these  measures  be  properly  and  swiftly  implemented  the  Italian  NRRP,  they  would  effectively 
contribute to address the challenges covered by the country-specific recommendations on labour 
market.  

Reforms and investments to improve the educational outcomes and to boost upskilling and 
reskilling,  particularly  in  view  of  the  twin  transition  are  envisaged  by  the  plan.  A  set  of 
reforms  and  investments  aims  at  improving  early-  and  primary  education  by  extending  and 
upgrading nurseries and kindergartens, increasing the supply and recourse to full time in primary 
schools and improving sport facilities. Measures are also envisaged to improve the educational 
outcomes  in  secondary  education  while  improving  employability  and  fighting  early-school 
leaving.  Particularly,  targeted  projects  are  financed,  especially  in  Southern  regions,  to  keep 
vulnerable pupils in school and support students already out of the education system. The plan 

45 

 
 
 
 
envisages a overhauling re-organisation of the school system to match the current demographic 
trends, coupled with a reform of the orientation system to ease the transition to university and the 
labour market. To this end, the reform of Technical and Professional Institutes is also included in 
the  plan.  A  reform  of  the  teaching  profession  is  included  too,  focusing  particularly  on 
recruitment,  selection,  mobility  and  training  of  teachers.  The  Plan  envisages  a  set  of  measures 
concerning tertiary education, particularly the reforms of enabling degrees and degrees group as 
well as the reform of student housing framework and measures for vocational-oriented secondary 
education.  The  number  of  scholarships  will  be  increased  while  Ph.D  programmes  will  also  be 
reformed and extended. Significant investments are envisaged to foster technological innovation 
and  equipment  updates,  strengthen  the  scientific,  technological  and  language  skills  of  students 
and  teachers,  with  specific  focus  on  women  and  STEM  curricula. In  order  to  foster  upskilling 
and reskilling, the revision of the governance of the vocational training system is envisaged, with 
the  aim  to  define  uniform  standards  and  essential  levels  of  vocational  training,  through  the 
adoption of the National Plan for New Skills. In the implementation phase, it will be important to 
focus  on  activation  measures  to  encourage  people  to  aquire  relevant  digital  skills  to  promote 
employability, high quality jobs, and facilitate the digital transition of the economy. Overall, the 
Plan is expected to contribute to tackle the challenges related to human capital formation, both in 
terms of education and adult learning.  

Significant  investments  coupled  with  sectoral  reforms  aim  to  support  research  and 
innovation and the quality of infrastructure, taking into account regional disparities and with 
a view to the twin transition. The measures particularly concern digital infrastructure, waste and 
water  management,  the  clean  and  efficient  use  of  energy,  sustainable  public  transport,  and 
research and innovation. Particularly, on the regional divide in the quality of infrastructure, the 
Plan includes  investment in  broadband, high-speed railways  and regional  lines in  the South,  in 
“last mile” connections and port infrastructure in  the Special Economic Zones, in  waste, water 
and  wastewater  management infrastructure.  Thus,  if  the  investments  are  properly  and  swiftly 
implemented,  the  Italian  NRRP  would  contribute  in  reducing  the  infrastructural  gap  between 
Northern and Souther regions. 

A  number  of  measures  of  the  Plan  are  expected  to  significantly  contribute  to  supporting 
research  and  innovation.  The  Plan  includes  measures  to  foster  simplification  of  funds 
management,  mobility  of  high-profile  resources,  including  researchers  and  managers,  and 
improve researcher’s careers. A set of investments is envisaged to strengthen R&I activities and 
promote  partnerships  between  universities,  research  institutes  and  private  firms  for  basic  and 
applied  research.  Further  investments  aim  at  supporting  innovation  and  technology  transfer 
processes,  including  by  reinforcing  the  financial  endowment  of  IPCEIs and strengthening  of 
technology transfer centres by industry segments. Circular economy, hydrogen, space and earth 
observation, green and digital transitions, sustainable transport and energy  are among other the 
mentioned  R&I  topics.  Advanced  digital  technologies  (e.g.  Artificial  Intelligence,  Quantum  or 

46 

 
 
 
 
HighPerformance  Computing)  are  broadly  addressed  in  the  Plan,  through  the  creation  of 
dedicated  centers  and  the  connection  with  European  initiatives.  The  plan  also  includes 
investment targeted at strengthening the enabling conditions for R&I. To this end, it is envisaged 
a fund for  research and innovation infrastructures, measures to  support Start-ups financing  and 
the introduction of innovative doctorates that respond to the needs of innovation by enterprises 
and promote the hiring of researchers by companies. Overall, the set  of measures envisaged in 
the Italian NRRP have the potential to significantly address the challenges concerning research 
and  innovation.  The  impact  and  coherence  of  the  set  of  R&I  measures  is  expected  to  be 
monitored and evaluated as to adjust to the evolving challenges. 

Relevant investments are envisaged to boost digital infrastructure and improve its quality. 
The  envisaged  broadband  investment  will  bring  gigabit  connectivity  to  NGA  grey  areas  and 
scattered households in NGA white areas. These actions have the potential to guarantee the goal 
of providing all households with 1 Gigabit connectivity by 2030. Additional sub-measures will 
ensure  connectivity  at  Gigabit  speed  to  public  schools,  hospitals  and  remote  islands.  The  plan 
will  also  boost  coverage  of  5G  networks.  In  particular,  investments  are  envisaged  in  market 
failure  areas  in  order  to  bring  5G  connectivity  to  populated  areas.  Additional  interventions  are 
planned to bring 5G along the main European transport corridors and 5G coverage to 10 000 Km 
of extra-urban roads. The Plan also includes investments to upgrade the digital infrastructure of 
the public administration and strengthen its security. Thus, the Plan is expected to contribute to 
tackle the challenges covered by the country-specific recommendations on digital infrastructures. 

The  Plan  rolls  out  ambitious  investments  on  renewables,  clean  and  efficient  energy, 
sustainable public transport, waste and water management. The measures are in line with the 
2020  guidelines  issued  by  the  Commission  to  Italy  on  the  key  climate  and  energy  priorities  in 
view  of  the  implementation  of  its  national  energy  and  climate  plan49.  It  envisages  important 
investments  in  renewables  (hydrogen,  biomethane,  offshore,  photovoltaic),  smart  grids  and 
energy  efficiency  (renovation  through  the  Superbonus  110%,  energy-efficient  municipalities). 
The  Plan  proposes  ambitious  rail,  metro,  tram,  port  and  cycling  infrastructure  investments, 
complemented  by  a  strong  support  for  Zero  Emission  Vehicles  in  land  transport  and  related 
infrastructure. The Plan includes important investments in waste treatment facilities and flagship 
projects for the separate collection of electronic, plastic and textile waste. Finally, the plan also 
contains important investments in water and wastewater infrastructure, soil re-use and adaptation 
to climate change. These investments are accompanied by important reforms of concessions and 
local  public  services  (cf.  business  environment  reforms),  the  reduction  of  the  fragmentation  of 
water utilities and the adoption of an ambitious National Circular Economy Strategy. The Plan 
contains targets to reduce regional disparities in waste. 

49 SWD(2020) 911 final. 

47 

 
 
 
  
                                                 
The  Plan  includes  a  set  of  reforms  and  investments  to  increase  the  effectiveness  of  the 
public  administration,  particularly  by  improving  the  management  of  public  employment, 
reducing red tape, and strengthening the administrative capacity, especially at local level.  If all 
these  investments  and  reforms  will  be  properly  and  swiftly  adopted  and  implemented,  the 
country-specific  recommendations  on  public  administration  could  be  substantially  addressed, 
more specifically: 

- 

-  The  measures  on  public  employment  focus  on  the  selection  and  recruitment  of  public 
employees  and  it  is  coupled  with  investments  for  the  creation  of  a  single  recruiting 
platform  and  of  an  integrated  digital  toolkit  on  skills  and  profiles.  To  retain  valuable 
human  resources,  the  plan  includes  a  reform  of  public  administration  careers,  both  in 
terms  of  horizontal  and  vertical  mobility,  and  investments  for  upskilling  and  reskilling, 
including digital skills.  
In  parallel,  a  set  of  reforms  and  investments  will  focus  on  enhancing  administrative 
capacity  and  reducing  red  tape,  to  simplify  and  speed  up  administrative  procedures. 
Particularly, an administrative simplification through ad hoc legislative interventions (fast 
track)  is  envisaged  for  administrative  procedures  as  well  as  the  elimination  of 
authorizations not justified by public interest.  
These measures are complemented and reinforced by significant investments and reforms 
to  boost the digitalisation of the administrations,  creating a national  cloud-based hybrid 
infrastructure (PSN), fostering and effectively supporting the migration to  the cloud  for 
datasets  and  applications  as  well  as  ensuring  interoperability.  The  Plan  also  intends  to 
improve  and  boost  the  supply  of  citizen-oriented  digital  services  and  ensure  the  wide-
spread adoption thereof across both central and local administrations, while strengthening 
Italy’s  defenses  against  cybercrime.  To  ensure  the  swift  implementation  of  the  reforms 
and deployment of the ICT investment, a dedicated “Transformation office” for a digital 
public administration will be set up to coordinate the effort and support the migration to 
cloud,  the  adoption  of  digital  public  service  platforms  and  the  improvement  of  citizen 
experience. Furthermore, a set of incentives and obligations will be introduced aimed at 
facilitating  the  migration  to  cloud  and  removing  procedural  constraints  to  the  broad 
adoption  of  digital  services. Finally  specific  actions  are  envisaged  to  ensure  the  timely 
and efficient procurement of ICT services.  

Reforms and investments are envisaged to increase the efficiency of the justice system. The 
Plain  aims  at  continuing  the  efforts  deployed  so  far  to  reduce  the  length  of  civil  and  criminal 
proceedings  and  reduce  the  backlog  of  cases,  building  on  already  implemented  measures  and 
reforms  under  discussion  at  Parliament.  To  this  end,  significant  temporary  investment  is 
envisaged  in  human  resources  to  speed  up  the  reduction  of  disposition  time  and  backlog  of 
proceedings.  Backlogs  and  length  of  proceedings  related  to  administrative  justice  would  also 
benefit  from  a  less  significant  temporary  investment  in  human  resources.  Investment  will  be 
complemented  by  reforms  to  increase  efficiency  gains  and  enhance  the  system’s  organisation, 

48 

 
 
 
particularly  by  strengthening  the  Trial  Office,  strengthening  young  human  capital,  including 
through  specific  training  actions,  and  introducing  new  technical  and  administrative  roles. 
Regulatory  measures  are  envisaged  to  effectively  reduce  the  backlog  and  the  duration  of  civil 
and criminal trials as well as specific investments to increase the efficiency of the administrative 
justice.  The  set  of  investments  and  reforms  will  be  complemented  by  measures  to  support 
national  investments  for  the  digitalization  of  judicial  offices,  including  a  full  digitalised 
procedure both for civil and criminal proceedings, the development of advanced systems for the 
digital  collection  of  procedural  information  and  data,  and  the  enhancement  of  the  capacity 
building of the justice administration. Finally, measures to review the insolvency framework are 
envisaged,  thus  contributing  to  mitigate  the  potential  negative  impact  of  the  COVID-19 
pandemic  on  banks’  balance  sheets.  Overall,  the  Italian  NRRP  is  expected  to  significantly 
address the country specific recommendations on the justice system and insolvency framework. 

The  Plan  also  envisages  substantial  reforms  to  improve  the  overall  business  environment 
and  to  reduce  barriers  to  competition  through  Annual  Competition  Laws,  simplifying  public 
procurement,  strengthening  market  surveillance  and  reducing  public  administration’s  late 
payments.  Under  the  Plan,  Italy  commits  to  adopt  annual  competition  laws  in  2021,  2022  and 
2023.  These  laws  will  notably  increase  competitive  processes  for  the  award  of  public  service 
contracts  of  waste  management  and  local  public  transport  as  well  for  port,  hydropower,  gas 
distribution  and  highways  concessions.  The  Plan  also  envisages  to  enhance  the  regulatory 
oversight  and  the  adequate  compensation  of  local  public  services,  as  well  as  to  reduce  their 
fragmentation.  The  Plan  envisages  the  phase  out  of  electricity  regulated  prices  for  micro-
enterprises and households as from 2023, as encouraged by the Commission’s assessment of the 
National  Energy  and Climate Plan, together  with  flanking measures to  improve competition in 
retail  electricity  markets.  Regions  are  also  provided  with  incentives  to  tender  out  their  public 
service  contracts  for  regional  services.  The  Plan  also  includes  a  major  reform  of  public 
procurement to reduce the timing of procedures to less than 100 days and ensure a more uniform 
application of rules through less fragmentation of contracting authorities, reinforced coordination 
of  public  procurement  policy  and  further  digitalisation.  The  Plan  envisages  the  rationalisation, 
digitalization  and  professionalisation  of  the  market  surveillance  authorities.  Finally,  it  also 
envisages the reduction of public administration’s late payments to the levels required under the 
Late Payments Directive.   

Overall,  the  Italian  NRRP  is  expected  to  have  a  significant  impact  on  the  economy. 
The Plan principally  aims  at  funding  additional  public  investment,  while  limited  funding  is 
envisaged  for  incentives  to  business  investment and  reducing taxes  on  labour and, to  a  limited 
extent, for current government expenditure and transfers to households. Real GDP is estimated to 
grow  by 12,7%  between  2020  and  2026, which  implies  that economic  output would be  3,6% 
higher by 2026 compared with a scenario without the plan. While in the short-term the demand 
effects  via  increased  public  investment  dominate,  higher  investment  is  expected  to  boost  the 

49 

 
 
 
 
public capital stock with positive effects on potential and actual GDP in the medium term. In line 
with  the  estimated  higher  economic  activity employment  levels are  projected  to  be 3,2% 
higher than without recovery and resilience plan by 2026.  

Taking  into  consideration  the  reforms  and  investments  envisaged  by  Italy,  its  recovery  and 
resilience  plan  is  expected  to  contribute  to  effectively  addressing  all  or  a  significant  subset  of 
challenges  identified  in  the  country-specific  recommendations,  or  challenges  in  other  relevant 
documents officially adopted by the Commission under the European Semester, and the recovery 
and  resilience  plan  represents  an  adequate  response  to  the  economic  and  social  situation  of 
Italy. This would warrant a rating of A under the assessment criterion 2.2 in Annex V to the RRF 
Regulation. 

Table 4.2. Mapping of country challenges identified in 2019-20 country-specific 
recommendations and Italian RRP components  

Country 
challenges 

Associate
d CSR 
(2019-
2020) and 
European 
Semester 
recomm. 

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2020.1.1.  

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2019.2.1; 
2019.2.2; 
2029.2.3; 
2020.2.1; 
2020.2.2; 
2020.2.3.  
2019.2.4 
2020.2.4  
2020.1.2; 
2020.1.3.  
2019.3.1; 
2020.3.1;  
2020.3.2; 
2020.3.5.  
2019.3.1; 
2020.3.1; 
2020.3.2; 
2020.3.1.8
.  
2019.3.1; 
2020.3.1; 
2020.3.2; 
2020.3.4; 
2020.3.7 ;  
2019.3.1: 
2020.3.1; 
2020.3.2; 
2020.3.6.  

2019.3.3; 
2020.3.2  

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2019.3.2; 
2020.4.2  

2019.4.1; 
2019.4.2; 
2020.4.1  

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2019.5.1;  
2019.5.2  

○ 

Labour 
market and 
social policies 

Education 
and skills 

Healthcare 

Research and 
innovation 

Digital 
infrastructur
e 

Energy, 
resources and 
climate 
change 

Transport 

Business 
environment 
and 
competition 
Public 
administratio
n 
Justice 
system and 
anti-
corruption 
framewok 
Financial 
markets and 
access to 
finance 

4.3. Growth  potential,  job  creation,  economic,  institutional  and  social  resilience, 
European  Pillar  of  Social  Rights,  mitigating  the  impact  of  the  crisis,  and  social 
territorial cohesion and convergence 

Fostering economic growth and jobs 

51 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The Plan focuses on growth-enhancing reforms and investments that  target long-standing 
vulnerabilities  and  structural  deficiencies.  The  main  objectives  of  the  plan  are  to  spur 
innovation  and  digitalisation,  accelerate  the  ecological  transition  and  to  strengthen  social 
cohesion and inclusion. The envisaged reforms concentrate on public administration, justice, the 
simplification of legislation and the promotion of competition. This comprehensive reform and 
investment package is targeted on improving Italy’s growth potential and increasing job creation. 
The  Plan  envisages  to  allocate  most  of  the  Next  Generation  EU  funding  to  additional  public 
investment. A minor share of the funding will be used for incentives for business investment and 
reducing  taxes  on  labour  and,  to  a  limited  extent,  for  current  government  expenditure  and 
transfers to households. 

The additional GDP growth induced by the Plan is estimated to be substantial and further 
spurred by spillover effects. The projections assume that all grants and half of loans requested 
under  the  recovery  and  resilience  facility  as  well  as  resources  available  under  REACT  EU, 
Horizon,  InvestEU,  Just  Transition  Fund,  Rural  Development  and  RescuEU  will  be  used  to 
finance  additional  government  expenditure  and  in  particular  public  investment  (for  a  total  of 
around  EUR  144  billion)(see  Box  4.3.1).  While  in  the  short-term  the  demand  effects  via 
increased public investment dominate, higher investment is expected to boost the public capital 
stock with positive effects on GDP in the medium term. A sizeable part of the estimated growth 
impact  is  due to spillover effects  that materialise due to  the synchronised and EU-wide reform 
and investment programme. The macroeconomic impact presented in the plan takes into account 
additional  measures  expected  to  be  financed  with  national  resources,  resulting  in  an  overall 
expenditure aggregate of around EUR 183 billion. Around 62% of these resources are expected 
to be used for public investment.  Although the projection results are not directly comparable due 
to the different assumptions on the relevant expenditure, the central projections included in the 
Plan  assume  a  higher  efficiency  of  public  capital  than  the  Commission  analysis.  While  this 
higher  efficiency  appears  in  principle  achievable,  it  requires  an  effective  and  sound 
implementation  and  a  high  productivity  of  the  investment  stimulus.  Therefore,  these  estimates 
are subject to downside risks. 

The Plan has the potential to trigger sizeable employment effects and increase labour force 
participation,  especially  of  women.  The  significant  demand  effects  triggered  by  the  Plan  are 
likely to benefit the labour market. Sustained measures included in the Plan to facilitate women’s 
entry into the labour market, such as a better provisions of care facilities, are set to have a long-
term  impact  on  labour  supply  and  potential  growth.  Moreover,  programmes  to  up-  and  reskill 
both  employed  and  unemployed  workers  as  well  as  initiatives  to  enhance  the  employability  of 
young people is set to raise aggregate labour productivity in the medium and long term.  

Digitalisation  and  the  ecological  transition  are  expected  to  generate  the  largest  growth 
effects,  followed  by  investment  in  education  and  research.  According  to  the  Plan,  business 

52 

 
 
 
 
 
investment  supported  by  tax  credits  (Transizione  4.0),  public  spending  on  ultra-broadband 
infrastructure and 5G networks and investment  in  strengthening supply chains  are estimated to 
buttress GDP growth in the medium-term. However, the growth impact islikely to be dampened 
by  the  high  import  content  of  ICT  equipment.  The  green  transition  led  by  construction 
investment (Superbonus) and investment in Research & Development as well as expenditure on 
education is expected to result in an additional growth impact. 

Structural  reforms  have  the  potential  to  sustain  the  estimated  investment-induced  output 
effects. Model-based Commission estimates suggest that addressing structural shortcomings by 
reducing the performance gap with the best-performing countries could have a significant impact 
on growth in  the long term. Reform  areas  with  the largest  gaps  and thus the biggest  estimated 
long-term growth impact include  the public administration and the judiciary system combined 
with measures to enhance competition in product markets. Estimates are based on the assumption 
that  the  pace  of  structural  reform  efforts  in  these  areas  is  maintained  in  the  longer  term.  They 
might thus be considered as a best-case scenario subject to sizeable uncertainty. 

Box 4.3.1: Stylised NGEU impact simulations with QUEST – Italy 

Model simulations conducted by the Commission using the QUEST model show that the economic 
impact of the NGEU in Italy could lead to an increase of GDP of between 1,5% and 2,5% by 2026.[1] 
After 20 years, GDP could be 1.1% higher. Spillovers account for a large part of such impact.  
According to these simulations, this would translate into up to 240 000 additional jobs. Cross border 
(GDP)  spillovers  account  for  0,3  pp.  in  2026,  showing  the  value  added of  synchronised  expenditure 
across Member States (line 2). Even in a scenario with a lower productivity of NGEU funds, it would 
still lead to a significant impact (line 3).[2] 

Table  1:  QUEST  simulation  results  (%-deviation  of  real  GDP  level  from  non-NGEU  case,  linear 
disbursement assumption over 6 years) 

Scenario 

Baseline 

   of which spillover 
Low productivity 

202
1 

1,0 

0,2 

0,8 

2022 

1,8 

0,3 

1,4 

202
3 

1,9 

0,2 

1,3 

202
4 

2,0 

0,3 

1,3 

202
5 

2,3 

0,3 

1,4 

2026 

2,5 

0,3 

1,5 

202
7 

2,1 

0,2 

1,0 

202
8 

1,7 

0,2 

0,5 

2029 

1,8 

0,1 

0,6 

203
0 

1,8 

0,1 

0,6 

2040 

1,1 

0,0 

0,5 

This stylised scenario does not include the possible positive impact of structural reforms, which can 
be substantial. A model-based benchmarking exercise shows that undertaking structural reforms that 
would result in halving the gap vis-à-vis best performers in terms of indicators of structural reforms 
could raise Italian GDP by around 17% in 20 years time, more than the 11% found for the EU average, 
the difference reflecting the relatively larger gaps towards best performers in Italy. [3] 
Due to the differences in the assumptions and methodology, the results of this stylised assessment 
cannot be directly compared to the numbers reported in chapter 4 of Italy’s RRP. 

[1]  RRF  amounts  to  roughly  90%  of  NGEU,  which  also  includes  ReactEU,  Horizon,  InvestEU,  JTF,  Rural 

53 

 
 
 
 
 
 
 
 
 
Development and RescEU. 
[2] Technically, the low productivity scenario considers a significantly reduced output elasticity of public capital. 
[3] Varga, J, in 't  Veld J. (2014), “The potential growth impact of structural reforms in the EU: a  benchmarking 
exercise ", European Economy Economic Papers no. 541.  
http://ec.europa.eu/economy_finance/publications/economic_paper/2014/pdf/ecp541_en.pdf. 

Strengthening Social and Territorial cohesion 

The  Recovery  and  Resilience  Plan  presents  a  comprehensive  set  of  measures  to  address 
labour market deficiencies and  to improve social cohesion.  These policies include investing 
in  enhancing  women’s  empowerment  and  combating  gender  discrimination,  increasing  young 
people’s  employment  prospects,  tackling  territorial  disparities  in  demographic  and  services; 
supporting  skill  development  and  employment  transition;  investing  in  the  development  of  the 
South  and  internal  areas.  The  Plan  addresses  the  vulnerabilities  identified  by  the  Social 
Scoreboard  and  provides  a  detailed  mapping  of  selected  interventions  of  the  Recovery  and 
Resilience Plan to the criteria of the Social Scoreboard.  

The Plan includes measures to strengthen social and territorial cohesion and contribute to 
the  European  Pillar  of  Social  Rights  by  improving  several  labour  market  and  social 
indicators.  The  measures  of  Component  M5C1  introduce  a  comprehensive  and  integrated 
reform of active labour market policies (ALMPs) and vocational training, by defining, in close 
coordination  with  the  regions,  essential  levels  of  training  for  the  most  vulnerable  groups. 
Strengthening  ALMPs  and improving  the  capacity  building  of public  employment  services 
(PES), including their integration with education and training providers and private operators are 
expected to increase services’ efficacy and strengthens institutions. In addition, the measures of 
this  component  aim  at  reducing  social  vulnerabilities  to  shocks,  in  particular  by focusing  on 
undeclared work in all its forms and sectors by outlining initiatives for more effective controls 
and  sanctions  along  with  stronger  incentives  to  work  legally.  Furthermore,  this  component 
promotes  gender  equality  (e.g., equal  pay)  as  explained  in  more  details  below,  through  the 
gender equality certification system and by promoting female entrepreneurship. It also invests in 
young  people  by  increasing  the  quantity  and  quality  of  training  programmes,  for  instance, 
through the participation to the Universal Civil Service programme. Component M5C2 includes 
measures to increase social inclusion with actions targeted towards vulnerable and disadvantaged 
groups such as people with disabilities and older people. It addresses major social vulnerabilities 
in terms of material poverty and housing deprivation and invests in urban regeneration and sport 
to  foster social  inclusion and integration. Component M5C3 promotes special interventions for 
territorial  and  social  cohesion.  For  instance:  (i)  it  introduces  procedural  simplification  and 
infrastructural  investment  in  Special  Economic  Zones;  (ii)  it  strengthens  resilience  and 
attractiveness  of  internal,  peripheral  and  mountain  areas  through  investments  in  (a)  social 

54 

 
 
 
 
 
 
 
 
infrastructure  that  can  be  used  to  increase  the  provision  of  services  on  the  ground  and,  (b) 
community-based health services, such as rural pharmacies; (iii) it promotes the transformation 
of assets confiscated from organised crime into public goods such as social housing and socio-
cultural  centres  for  young  people;  (iv)  it  enhances  investments  for  reducing  education  poverty 
and strengthening youth services for children with the support of the Third sector. 

Many other investments and reforms included in the plan, in addition to the one presented 
under Mission 5, are expected to have a positive impact on social inclusion and cohesion. 
For instance, Mission 2 includes reforms on waste management and  circular economy that will 
have a substantial impact in strengthening social inclusion and cohesion by improving economic 
sustainability and living conditions. Other measures include the enhancement of public transports 
and  soft  mobility  (i.e.  cycling)  that  will  contribute  to  social  cohesion  by  developing  more 
sustainable  local  transport  and  increasing  the  attractiveness  of  the  target  areas.  Mission  4 
includes  direct  investments to  strengthen basic  digital  skills among citizens,  to  boost  the 
provision and the quality of education services as well as measures aimed at increasing students 
and young people’s skill levels. The investment directed to improving the resilience of the health 
care system in Mission 6, will also contribute to the fulfilment of principle sixteen (i.e., access to 
healthcare) of the European Pillar of Social Rights. 

Throughout  the  Plan,  there  are  some  measures  that  are  expected  to  contribute  to 
addressing the country’s challenges in the area of gender equality and equal opportunities 
for all. These include measures addressing specifically the challenges to gender equality, such as 
the  support  to  female  entrepreneurship  or  the  establishment  of  a  national  gender  equality 
certification  system.  Specific  measures  are  also  envisaged  to  support  equal  opportunities  for 
younger  people,  including  measures  aimed  at  enhancing  STEM,  digital  and  innovation  skills, 
with a particular focus on gender equality and equal opportunities for all. Measures on enhancing 
community and home-based social and health services, such as innovative housing solutions and 
equipment, aim at promoting the independent living of persons with disabilities and older people. 
The  plan  explains  how  the  various  components  are  expected  to  contribute,  even  indirectly,  to 
equal opportunities, in particular for women and younger people. The expected contribution for 
specific groups, such as persons with a minority ethnic or racial background, remains unclear in 
the  plan.  Especially  when  the  anticipated  contribution  is  indirect  only,  close  monitoring  of  the 
plan’s concrete implementation will be essential to ensure that it delivers the expected results and 
forms part of a comprehensive strategy, in synergies with national equality policies such as the 
National Strategy for Gender Equality 2021-2026. 

To  conclude,  the  Plan  contains  a  number  of  measures  that  are  expected  to  effectively 
contribute  to  strengthening  social  cohesion  and  social  protection  systems,  therefore  it  is 
expected to have a high impact. Overall, these measures are expected to contribute to principles 

55 

 
 
  
 
 
1,  2,  3,  4,  5,  17  and  19  of  the  European  Pillar  of  Social  Right  and  be  in  line  with  the  Youth 
Guarantee. 

Box 4.3.2: Employment and social challenges in light of the Social Scoreboard accompanying the 
European Pillar of Social Rights 
The Social Scoreboard supporting the European Pillar of Social Rights points to a number of employment 
and  social  challenges  in  Italy.  The  COVID-19  crisis  has  halted  the  weak  but  positive  labour  market 
developments observed in the past years and risks leading to an increase in the share of people at risk of poverty 
or social exclusion (AROPE). The unemployment rate, at 10,2% in February 2021, was significantly above  the 
EU average (7,5%). Despite recent improvements, the share of long-term unemployed remains extremely high in 
Italy (4,7% in 2020). The overall employment rate in 2020 was among the lowest in the EU, at 62,6%, and the 
employment rate of women is about 20pps below that of men. This very large gender employment gap is partly 
attributable to caring responsibilities of women. Childcare enrolment has decreased in recent years, with 26,3% of 
children aged less than 3 years in formal childcare in 2019 compared to 28,6% in 2017.  

The employment situation of young people in Italy 
is critical. Despite a continued decline in recent years, 
the share of young people aged 15-24 not in education, 
employment  or  training  (NEET)  remains  among  the 
highest  in  the  EU  and  has  significantly  worsened  in 
the  current  crisis  (from  18,1%  in  2019  to  19%  in 
2020).  Of  particular  concern  is  the  25-29  age  group, 
for  which  the  NEET  rate  in  2020  was  31,5%.  Early 
school  leaving  improved  by  0,4  pps  annually,but 
remains  an  area  where  substantial  progress  is  needed 
given the below-average performance (13,1% in 2020 
compared  to  10,1%  in  EU‑ 27)  and  wide  regional 
differences.  While  poverty  has  been  gradually 
decreasing  before  the  crisis,  the  pandemic  may 
reverse this trend. In 2019, the at risk of poverty or 
social exclusion rate was among the highest in the EU 
(25,6%)  and  was  particularly  acute  for  children 
(27,7%).  These  challenges  are  also  reflected  in  the 
limited  poverty-reduction  impact  of  social  transfers, 
which  is  one  of  the  lowest  in  the  EU  (20,2%  vs  EU 
average of 32,4%).  
The Recovery and Resilience Plan (RRP) submitted 
by Italy addresses a  multitude of employment and 
social challenges relevant for the implementation of 
the  Pillar.  To  improve  labour  market  dynamics  and 
working conditions, Italy plans to enhance ALMPs by 
investing  in  the  capacity  of  the  Public  Employment 
Services  (PES)  and  strengthening  the  dual  system  of 
initial  vocational  education  and  training  (VET).  The 
plan  includes  milestons  and  targets  on  undeclared 
work,  which  together  investment  from  the  national 

56 

 
 
 
 
 
budget and the other EU fund, would contribute to step forward the 2019 CSR. To ncrease women labour market 
participation,  the  RRP  includes  investments  in  early  childhood  education  and  care,  the  creation  of  women’s 
enterprises  and  the  introduction  of  a  "National  gender  equality  certification  system"  for  enterprises.  To  foster 
equal opportunities and access to the labour market, the plan includes a new strategy for lifelong learning and a 
modernisation of the upskilling and reskilling system. Measures include adopting a National Plan for New Skills 
that  would  define  essential  levels  of  vocational  training  and  supporting  upskilling  and  reskilling  of  workers, 
unemployed  and  workers  in  transition,  including  young  people  and  adults.  Even  though  additional  efforts  are 
needed,  this  reform  could  help  increase  the  percentage  of  individuals  with  basic  or  above  basic  digital  skills, 
which  is  one  of  the  lowest  in  the  EU  (42%  vs.  56%  EU-wide  in  2019).  Dedicated  investments  are  planned  to 
address employment and social challenges in the South and the areas struck by earthquakes.  
With more people likely to fall back on the basic safety nets due to the COVID-19 crisis, reforms on social 
protection  and  inclusion  are  important  to  provide  much  needed  support,  in  synergy  with  the  European 
Social  Fund  and  other  EU  funding.  The  RRP  also  tackles  social  exclusion,  mainly  through  social  housing, 
investments to strengthen the capacity of national social services, investments in education and greater access to 
sports for disadvantaged groups. The plan also includes support to persons with disabilities and the labour market 
integration  of  vulnerable  groups.  Finally,  Italy  included  measures  aimed  at  reforming  and  expanding  territorial 
healthcare  assistance  and  investing  in  the  digitalisation  of  the  health  services  ,  with  potential  for  strengthening 
access to care. 

Reducing Vulnerability and Increasing Resilience 

Several  measures  and  components  aim  to  reduce  the  country’s  vulnerabilities  and  to 
increase its capacity to absorb shocks. The main vulnerabilities identified in the context of the 
Macroeconomic  Imbalances  Procedure  are  related  to  the  high  public  debt,  the  protracted  weak 
productivity  growth, the financial sector and the labour market.  The measures discussed in  the 
previous two sub-sections, such as the investment in research, innovation and infrastructure and 
the  reforms  to  reduce  barriers  to  investment,  including  in  the  public  administration  and  to 
improve the competitiveness of firms, can contribute to boost Italy’s productivity dynamics and 
growth, reducing in turn the public debt to GDP ratio. 
The  capacity  to  withstand  shocks  crucially  depends  on  at  least  four  factors.  First, 
sufficiently flexible labour market complemented with well targeted and effective social safety 
net  is  necessary  to  limit  damages  to  employment  in  case  of  a  negative  shock.  Second,  fiscal 
policy should be in a position to act counter-cyclically in case of a drop in aggregate demand in 
the  private  sector.  Third,  public  administration  should  have  the  capacity  to  implement 
coordinated policy responses in time of need, and to be a helpful partner of the private sector in 
normal times too. Finally, a well-functioning financial market could play a crucial role in both 
preventing crises and in mitigating their impacts by avoiding financial acceleration.  

The  planned  reforms  in  the  labour  market  are  expected  to  improve  its  resilience.  As 
discussed above, the reforms of the active labour market policies and investments to modernise 
public employment services in Component M5C1 are expected to bring personalised and tailored 
made  activation  paths  for  the  unemployed,  a  strengthened  vocational  training  system,  a  new 
range  of  up/re-skilling  services.  Reforms  and  investments  under  the  same  component,  once 

57 

 
 
 
 
 
implemented, are set to improve the efficiency of the fight against undeclared work through the 
development  and implementation of a National  Action Plan, increase women’s participation in 
the labour market while also decrease gender pay gap, and support young people to acquire new 
competences and work experience through a Universal Civil Service. Labour market resilience is 
also expected to be strengthened by further  reforms and investments that promote digital skills 
(Component M1C2), strengthen the provision of education services and put in place measures to 
stimulate the transition towards a knowledge-based economy (Components M4C1 and M4C2). 

The  planned  reforms  aimed  at  the  most  vulnerable,  in  their  individual,  family  and  social 
dimensions  are  expected  to  increase  social  resilience.  Strengthening  the  role  for  integrated 
social services will support the definition of personalised models for improving the quality of life 
of persons with disabilities, the adoption of innovative models of social housing and investments 
in urban regeneration projects will support the re-functionalization of the existing building and 
improving access to affordable and adequate housing. The development of the resilience capacity 
of the most vulnerable individuals will also be reached through the dissemination of the culture 
of  sport  and  the  recovery  of  sports  infrastructure  through  the  creation  of  urban  parks  where 
sports can be combined with entertainment activities for the benefit of the communities. 

Resilience is also expected to be improved through investments in and measures supporting 
the  health  care  system,  public  administration,  digital  transition,  energy  efficiency  and 
building  requalification,  and  railway  infrastructure.  The  COVID-19  crisis  underlined  the 
strong  link  between  the  health  systems  and  the  economy.  A  stronger  and  more  resilient  health 
system  would  be  better  placed  to  ensure  preparedness  measures  (to  control  potential  disease 
outbreaks  in  the  future)  limiting  the  socio-economic  disruption,  to  absorb  surges  in  healthcare 
demand  and  to  ensure  the  alleviation  of  its  negative  consequences  on  citizens  and  workers. 
Through  reforms  and  investment  included  in  mission  6  of  the  Plan,  it  will  be  possible  to 
strengthen local health networks, tele-medicine, homecare and the integration between social and 
health  services.  Measures  related  to  the  digitalization,  modernization  and  reorganization  of  the 
public  administration  (Component  M1C1)  will  address  persisting  structural  challenges  and 
contribute  to  strengthening  capacities  of  institutions  as  well  as  their  resilience  to  shocks.  For 
instance,  streamlining  and  simplifying  legislation  repeals  or  amends  laws  and  regulations  that 
excessively  hamper  the  daily  lives  of  citizens,  businesses  and  public  administration. 
Furthermore, investment to favour the digital transition of culture and tourism will increase the 
competitiveness  and  the  resilience  of  these  sectors  (Component  M1C3);  while  the  measures 
aimed at increasing energy efficiency and buildings requalification (Component M2C3) will also 
improve social resilience and decrease vulnerabilities. For instance, the reduction of energy bills 
will  contribute  to  mitigate  the  risks  of  energy  poverty,  particularly  in  the  poorest  performing 
buildings  occupied  by  low-income  and  vulnerable  families.  They  would  also  improve  living 
conditions  by  enhancing  thermal  comfort  and  removing  harmful  substances.  In  addition,  the 
expanded  and  upgraded  railway  infrastructure  (Component  M3C1)  is  expected  to  enhance  the 

58 

 
 
 
 
resilience of transport systems, with wider beneficial impacts for other European Member States 
in terms of reduced vulnerabilities of logistic chains.  

Cohesion and convergence 

Investments focussed on the South of Italy will contribute to foster territorial cohesion and 
convergence, and to closing the infrastructure (and services) gap.  

Taking  into  consideration  all  reforms  and  investments  envisaged  by  Italy,  its  recovery  and 
resilience  plan  is  expected  to  have  a  high  impact  on  strengthening  the  growth  potential,  job 
creation, and economic, social and institutional resilience of the Member State, on contributing 
to the implementation of the European Pillar of Social Rights, including through the promotion 
of  policies  for  children  and  youth,  and  on  mitigating  the  economic  and  social  impact  of  the 
COVID-19  crisis,  thereby  enhancing  the  economic,  social  and  territorial  cohesion  and 
convergence within the Union. This would warrant a rating of A under the assessment criterion 
2.3 of Annex V to the RRF Regulation. 

4.4. The principle of ‘do no significant harm’  

The Regulation establishing the Recovery and Resilience Facility provides that no measure 
included in the recovery and resilience plan should lead to significant harm to any of the 
six  environmental  objectives  within  the  meaning  of  Article  17  of  the  Taxonomy 
Regulation50.  In  line  with  the  Recovery  and  Resilience  Facility  Regulation  and  the  Technical 
Guidance  on  the  Application  of  ‘do  no  significant  harm’  under  the  Recovery  and  Resilience 
Facility Regulation (2021/C58/01; ‘DNSH Technical Guidance’), Member States provide a ‘do 
no significant harm’ (DNSH) assessment, on which basis the Commission assesses whether each 
and every measure (i.e. each reform and each investment) included in the recovery and resilience 
plans complies with DNSH. DNSH compliance is a necessary condition for the Commission to 
positively assess the recovery and resilience plan. 

Italy’s recovery and resilience plan applies the DNSH Technical Guidance and template in 
presenting the DNSH assessment for each measure in the recovery and resilience plan. Italy 
has included a detailed DNSH assessment for each measure included its recovery and resilience 
plan in accordance with the template provided by the Commission, and in line with the DNSH 
Technical Guidance. Based on the information provided, the Commission has assessed whether 
and  how  each  measure  in  Italy’s  recovery  and  resilience  plan  complies  with  DNSH,  in 

[50]  The  six  environmental  objectives  comprise  (1)  climate  change  mitigation,  (2)  climate  change  adaptation,  (3) 
sustainable use and protection of water and marine resources, (4) the circular economy, (5) pollution prevention 
and control, and (6) protection and restoration of biodiversity and ecosystems. 

59 

 
 
 
 
 
 
                                                 
accordance with the criteria established in the Recovery and Resilience Facility Regulation and 
with the guiding principles set out in the DNSH Technical Guidance. 

Italy ensures that no significant harm is  done to environmental objectives by selecting  or 
designing  measures  complying  with  DNSH,  and  by  substantiating  DNSH  compliance  as 
part  of  the  DNSH  assessment.  By  selecting  measures  that  either  contribute  substantially  to 
environmental  objectives,  or  have  no  or  an  insignificant  foreseeable  impact  on  environmental 
objectives,  many  measures  in  Italy’s  recovery  and  resilience  plan  can  be  considered  DNSH 
compliant from the outset (e.g. certain measures in education and training, labour market, public 
administration). Other measures are designed to ensure compliance with DNSH, including broad 
support schemes that span across sectors and activities (e.g. in R&D&I, and support to SMEs). 
For  measures  requiring  a  ‘substantive  DNSH  assessment’  according  to  the  DNSH  Technical 
Guidance,  Italy  has  provided  evidence  and  assurances  substantiating  that  the  measures  do  not 
lead  to  significant  harm  to  any  of  the  six  environmental  objectives  (e.g.  sustainable  mobility, 
circular  economy,  renewable  energy,  water).  Italy  has  provided  notably  guarantees  that  its 
investments  in  waste  management  do  not  contain  investments  in  incinerators  and  mechanical 
biological treatment are envisaged; investments in renovation like the Superbonus 110% contain 
measures to manage demolition waste in line with waste disposal requirements; investments in 
bus rapid transit lanes will be reserved to electric buses; investments in offshore renewables will 
ensure the protection of marine resources, investments in desalination shall use the best available 
technologies  with  the  lowest  environmental  impacts;  investments  in  biomass  will  not  increase 
particulate emissions; and that investments in air navigation services will lead to a reduction of 
GHG emissions thanks to the improvement in the sequencing of aircraft, both in the airspace and 
route and in the approach to airports, resulting in a reduction in aircraft fuel consumption. 

While  compliance  with  DNSH  is  ensured  by  Italy,  there  are  measures  included  in  Italy’s 
recovery  and  resilience  plan  that  required  specific  evidence  and  commitments  through 
milestones  and  targets  to  substantiate  that  they  will  not  lead  to  significant  harm  to 
environmental objectives. This is the case, for example, for the Superbonus 110% tax deduction 
as a renovation incentive, which contains a milestone requiring the management of construction 
waste  according  to  circular  economy  principles.  This  is  also  the  case  with  demand  driven 
measures,  including  financial  instruments  and  certain  projects  that  envisage  calls  for 
proposals/tenders. Investments in last-mile road connections are compensated by investments in 
electric  charging  stations.  The  plan  does  not  include  any  road  transport  infrastructure  measure 
except some ‘last-mile’ connections in Special Economic Zones. To avoid significant harm to the 
climate change mitigation and pollution prevention and control objectives, Italy’s recovery and 
resilience plan includes as a flanking measure the extension of the recharging infrastructure for 
electric vehicles. 

Additional  guarantees  have  been  provided  for  vehicles  running  on  biomethane  and  for 
hydrogen.  Investments  in  agricultural  machinery  or  firefighting  vehicles  (Components  M2C1 
and  M2C2)  running  on  bio-methane  require  guarantees  that  they  will  not  use  fossil  methane. 

60 

 
 
Italian  authorities  have  provided  indications  for  component  2.2  that  vehicles  will  not  run 
methane and that biomethane will be compliant with Directive 2018/2001 on Renewables (RED 
II).  Italy  is  also  coming  with  measures  to  significantly  increase  the  production  of  biomethane. 
Investments  in  hydrogen  will  be  limited  to  green  hydrogen  and  will  neither  contain  blue 
hydrogen  nor  involve  natural  gas.  The  milestones  of  hydrogen  investments  also  include 
provisions to ensure that they will not result in activities with GHG emissions above 3 of tonnes-
equivalent of CO2 per tonne of H2 produced.  

Investments in water irrigation (Component M2C4) provide guarantees that they will not 
deteriorate the quality of existing water bodies. This principle is even more important as Italy 
has  already  a  certain  number  of  infringements  related  to  urban  wastewater  treatment,  drinking 
water and nitrates. In this context, the Plan secures that irrigation investment should aims at safe 
re-use of reclaimed water when feasible and/or to render existing irrigation more efficient, even 
if the concerned water body is in good status.  

Italy’s  recovery  and  resilience  plan  comprises  several  broad  measures  spanning  across 
sectors  and  activities,  which  are  designed  to be  DNSH  compliant.  As  set  out  in  the  DNSH 
Technical Guidance, measures of a more general nature, such as broad industry support schemes 
(e.g. financial instruments covering investments in companies across multiple sectors), should be 
designed  to  ensure  adherence  of  the  relevant  investments  with  DNSH.  This  is  the  case  of  the 
measure  Transition  4.0  in  Component  M1C2,  for  which  compliance  with  the  DNSH  principle 
has been ensured by carving out from the plan the portion of the scheme that was not expected to 
comply  with  the  DNSH  Technical  Guidance,  based  on  data  concerning  the  sectoral  uptake  of 
comparable  measures  in  the  past.  For  demand-driven  measures  entailing  the  use  of  financial 
instruments,  a  milestone  envisaging  the  adoption  of  an  investment  policy  in  line  with  RRF 
objectives, including in relation to DNSH, has been included.  

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  no  measure  for  the 
implementation  of  reforms  and investments  projects  included in  Italy’s recovery and resilience 
plan is expected to do significant harm to environmental objectives within the meaning of Article 
17  of  Regulation  (EU)  No  2020/852  (the  principle  of  ‘do  no  significant  harm’).  This  would 
warrant  a  rating  of  A  under  the  assessment  criterion  2.4  of  Annex  V  to  the  Recovery  and 
Resilience Facility Regulation. 

4.5. Green transition  

Climate target 

The  Recovery  and  Resilience  Facility  will  allow  Italy  to  accelerate  progress  towards  the 
2030 energy and climate objectives as enshrined in its national energy and climate plan and 
national  long-term  strategy.  The  Italian  plan  includes  measures  supporting  climate  change 

61 

 
 
 
 
 
 
objectives  for  an  amount  which  represents  37,5%  of  the  plan’s  total  allocation  (EUR  71  729 
million  out  of  EUR  191,5  billion),  based  on  the  methodology  for  climate  tracking  set  out  in 
Annex VI to the Recovery and Resilience Facility Regulation. The climate change contribution 
of each of the components of the recovery and resilience plan of  Italy is set out in Table 4.5.1 
below. 

Table  4.5.1:  %  climate  contribution  by 
component. Component 

M1C1. Digitalisation, innovation and security in the PA 
M1C2.  Digitalisation,  innovation  and  competitiveness  in  the 
production system 

M1C3. Tourism and culture 4.0 

M2C1. Circular economy and sustainable agriculture 
M2C2.  Renewable  energy,  hydrogen,  grid  and  sustainable 
mobility 

M2C3. Energy efficiency and renovation of buildings 

M2C4. Protection of land and water resources 

M3C1. Investments in the rail network 

M3C2. Intermodality and integrated logistics 
M4C1. Strengthening the provision of education services:from 
crèches to universities  

M4C2. From research to business 

M5C1. Employment policies 
M5C2.  Social  infrastructure,  households,  the  community  and 
the third sector  

M5C3. Special interventions for territorial cohesion 
M6C1.  Local  networks,  facilities  and  telemedicine  for  local 
health care  
M6C2.  Innovation,  research  and  digitalisation  of  the  national 
health service  
Total 

Cost 
(EUR million) 

Climate  contribution 
(EUR million) 

Climate  contribution 
(percentage) 

          9 722  

               -    

        23 895  

          6 675  

          5 265  

        23 778  

        15 362  

        15  054  

        24 767  

             630  

        19 436  

        11 440  

          6 660  

        11 216  

          1 975  

               -    

             917  

          2 291  

        21 879  

        12 618  

          9 407  

        20 563  

             213  

             696  

          1 972  

               -    

             280  

             252  

          7 000  

             640  

          8 626  

      191 499  

               -    

        71 729  

0,0% 

0,0% 

0,5% 

1,2% 

11,4% 

6,6% 

4,9% 

10,7% 

0,1% 

0,4% 

1,0% 

0,0% 

0,1% 

0,1% 

0,3% 

0,0% 

37,5% 

Four  components  make  up  90%  of  the  total  climate  contribution  of  the  recovery  and 
resilience  plan,  as  shown  in  the  Tale  4.5.2  below.  The  largest  contributions  are  from  the 
components  on  clean  power  (31%  of  overall  climate  contribution),  rail  network  (29%), 
buildings’ renovation (18%).  

Table 4.5.2: Top 4 components of the Italian plan, in terms of climate contribution  

Budget* (EUR m) 

% of total Plan* 

M2C2. Renewable energy, hydrogen, grid and sustainable 
mobility 
M3C1. Investments in the rail network 
M2C3. Energy efficiency and renovation of buildings 
M2C4. Protection of land and water resources 
Sum (Top 7 climate components) 

        21 879  
        20 563  
        12 618  
          9 407  
        64 467  

* Climate-related budget only 

30,5% 
28,7% 
17,6% 
13,1% 
89,9% 

62 

 
 
 
 
 
 
 
Italy  has  followed  Annex  VI  to  the  Recovery  and  Resilience  Facility  Regulation 
appropriately to track the climate expenditure of its recovery and resilience plan.  Specific 
safeguards  were  introduced  via  selection  criteria  for  the  investments  and  specific  provision  in 
milestones and targets, to ensure that the characteristics of the projects funded by the RRP are in 
line with the condition set out in Annex VI to the RRF Regulation. This is particularly the case 
for measures in Mission 2 and 3. 

Energy efficiency 

The  recovery  and  resilience  plan  is  fairly  ambitious  when  it  comes  to  renovations  for 
energy  efficiency  purposes.  The  plan  envisages  EUR  14  billion  to  support  the  Superbonus 
110% housing tax deduction active since 1 July 2020 and will remain in force until 30 June 2022 
(for  social  housing  until  31  December  2022).  Investments  on  tax  deductions  for  building 
renovation  measure  in  the  residential  sector  in  the  plan  represent  a  significant  share  –  around 
26%  -  of  the  public  budget  support  envisaged  in  the  National  Energy  and  Climate  Plan  2021-
2030 (NECP) for the energy renovation of residential buildings. In the years 2022 and 2023, the 
Superbonus  110%  will  achieve  approximately  one  third  of  the  annual  energy  savings  efforts 
from the residential sector set in the NECP, as well as one third of the annual renovation efforts 
in  m2  set  on  Italy’s  Long-Term  Renovate  Strategy  (LTRS).    The  objective  of  the  Superbonus 
110% to  achieve 190 ktoe/year of  energy  savings from  the residential sector will contribute to 
around  6%  of  the  total  2030  target  for  the  energy  savings  contribution  from  the  tax  deduction 
measures  in  the  residential  sector  estimated  in  the  Italian  NECP.The  Plan  also  envisages 
measures  to  simplify  the  access  to  the  tax  deduction  notably  through  the  development  of  a 
national  portal  for  energy  efficiency,  a  simplification  of  condominium  rules  and  procedures 
(minimisation of ex-ante checks). The Plan envisages also to update and strengthen the National 
Fund for Energy Efficiency and to accelerate the implementation phase of projects financed by 
the  PREPAC  programme.  Furthermore,  the  Plan  envisages  EUR  6  billion  to  improve  energy 
efficiency  of  municipalities.  Finally,  despite  the  significant  investment,  substantial  amounts  of 
additional public funding will be needed to mobilise the total volume of investments necessary to 
deliver  on  the  objective  of  the  national  energy  and  climate  plan,  in  particular  once  the 
Superbonus 110% will expire. 

The Plan also envisages reforms to increase competition in electricity and gas markets. The 
Plan envisages the phase out of regulated prices for micro-enterprises and households as from 1 
January  2023.  It  also  contains  flanking  measures  to  support  the  uptake  of  competition  in 
electricity retail markets (auction the customer base still under price regulation, fixing a ceiling 
as a maximum market share available to each supplier, allowing Italian consumers to ask their 
energy supplier to disclose their billing data to a third-party provider, increase transparency on 
the electricity bill by giving consumer access to the sub-components of the “Spese per oneri di 
Sistema”  and  remove  the  requirement  for  suppliers  to  collect  charges  unrelated  to  the  energy 
sector).  Italy  has  committed  to  deploy  at  least  33  million  second  generation  smart  electricity 

63 

 
 
 
 
meters  by  2026  (Q4  2025).  Finally,  the  Plan  will  make  the  tendering  of  concessions  contracts 
mandatory for gas distribution. 

Renewable energy sources 

Important investments  are envisaged to promote renewables for energy communities and 
jointly acting renewables self-consumers, as well as to develop offshore power production. 
Italy  proposes  to  use  the  Facility  to  invest  EUR  2,2  billion  in  energy  communities  in 
municipalities  of  less  than  5  000  inhabitants,  thus  supporting  the  economy  of  small 
municipalities,  often  at  risk  of  depopulation,  and  reinforcing  social  cohesion  towards  the  most 
vulnerable  population  groups  through  the  action  of  the  local  authority.  The  development  of 
energy  communities  and  jointly  acting  renewables  self-consumers  is  promoted  by  Directive 
2018/2001 on the promotion of the use of energy from renewable sources (RED II). Finally, the 
Plan also aims at investing EUR 600 million to promote Italy’s efforts to develop offshore multi-
power systems, combining wind, floating photovoltaic and wave motion power.  

Italy intends to use the Facility to boost the production of clean hydrogen in line with the 
flagship  projects  Power  Up  and  Refuel  and  Recharge.  Italy  intends  by  2030  to  meet  2% 
energy demand thanks to hydrogen and to install 5 GW of electrolysis capacity. Out of the 
EUR 10 billion investments needed till 2030 to reach these targets, the Plan provides for EUR 3 
billion  investments  in  electrolysers,  hydrogen  production  in  brownfield  sites  (so-called 
“hydrogen  valleys”),  the  experimental  use  of  hydrogen  in  hard-to-abate  industries  as  well 
hydrogen-powered  trains  and  trucks.  These  investments  are  completed  with  tax  incentives  to 
support  hydrogen  and  measures  to  simplify  and  reduce  regulatory  barriers  to  hydrogen 
deployment, envisaging notably systems of guarantees of origin of hydrogen and the setting up 
of refuelling stations along motorways.  Italy also intends to ensure that its 10-year deployment 
plan is coordinated with other Member States´ Transmission System Operators (TSOs). In areas 
like Taranto, the Just Transition Fund can later complement RRF investments in hydrogen-based 
“clean steel” production with up- and reskilling of steel workers. 

The  Plan  supports  Italy’s  efforts  to  increase  its  share  of  renewables  in  transport  and 
heating, in particular through the development of bio-methane. To support the development 
of biomethane from manure, the Plan supports EUR 2 billion investments in new plants and/or 
the  reconversion  of  existing  agricultural  biogas  plants  for  the  production  of  biomethane  for 
transport  and  heating.  These  investments  are  accompanied  by  reforms  to  further  authorise 
production  increases  and  support  them  through  grants.  Bio-methane  produced  from  anaerobic 
digestion of manure is in line with the Do-No-Significant-Harm principle and can be re-injected 
in the gas network, also helping to reduce methane emissions, supporting the objectives of Farm-
to-Fork and Methane strategies, as well as ammonia pollution. The development of biomethane 
is  part  of  the  greening  of  transport  fuels,  as  announced  in  the  Italian  National  Energy-Climate 

64 

 
 
 
 
 
Plan.  The  Plan  also  envisages  investments  in  agriculture  machinery  and  firefighting  vehicles 
powered with biomethane. 

Italy  will  be  conducting  a  certain  number  of  reforms  to  facilitate  the  authorisation  of 
renewable power production and to reform the award of hydropower concessions. The Plan 
envisages  a  certain  number  of  reforms  to  simplify  authorization  procedures  for  renewable 
onshore and offshore plants and a new legal framework to sustain the production from renewable 
sources  and  time  and  eligibility  extension  of  the  current  support  schemes,  in  line  with  the 
Directive 2018/2001 on the promotion of renewable energy (RED II)51. Finally, in line with the 
country-specific recommendations, Italy intends to make the tendering of concessions contracts 
mandatory  for  hydropower  and  define  a  predictable  regulatory  framework  for  hydropower 
concessions. Hydropower is the largest renewable energy source in Italy.   

Electricity  infrastructure  is  recognised  as  an  important  element  in  the  clean  energy 
transition  in  the  recovery  and  resilience  plan.  The  Plan  envisages  EUR  3.6  billion  in  the 
development  of  smart  grids  solutions,  namely  grid  reinforcement  and  digitalization  of  the 
electricity  network  to  increase  the  network  capacity  for  the  distribution  of  renewable  energy 
sources by at least 4 000 MW. These investments will increase the amount of energy produced 
by  renewables  fed  into  the  distribution  network  (with  related  digital  management)  and  also 
promoting greater electrification of consumption. About  40% of investments will take place in 
Southern Italy. 

Effort sharing 

The recovery and resilience plan contributes to Italy achieving its 2030 target of 33% GHG 
emissions  reduction  compared  to  2005  for  sectors  under  the  Effort  Sharing  Regulation 
(ESR),  including  transport,  agriculture,  waste  and  buildings.  Component  M2C2  (sustainable 
mobility)  and  Mission  3  (infrastructures  for  sustainable  mobility)  focus  on  reducing  GHG 
emissions from transport, which will contribute significantly to achieving the ESR target, as it is 
the sector in which GHG emissions continue to grow most. Reforms in public procurement will 
support the timely completion of important infrastructure investments in these areas. 

The  Plan  envisages  important  investments  in  sustainable  urban  mobility,  including  e-
mobility,  contributing    also  to  improve  air  quality.  Italy  will  be  investing  EUR  8  billion  in 
sustainable mobility, in particular in new metro, tram and bus rapid transit infrastructures (EUR 

51 This reform will inter alia complete existing simplifications for onshore plants, provide ad hoc simplifications for 
offshore  plants,  define  criteria  for  the  identification  of  the  areas  suitable  and  not  suitable  for  the  installation  of 
renewable energy plants joinyly agreed between State and Regions, simplify authorisation procedures RES support 
mechanism  also  for  additional  non-mature  or  with  high  operating  cost  technologies  and  reform  to  promote 
investment in storage systems.   

65 

 
 
 
 
 
 
                                                 
3,6 billion), 3 000 zero-emission buses (EUR 2,4 billion), regional trains rolling stock (EUR 0,8 
billion) and cycling paths (EUR 0,6 billion). Italy is also embarking in major reforms of its local 
public  transport  system  by  increasing  competitive  procedures  for  the  award  of  public  service 
contracts, as part of the reforms of local public services and simplifying authorisation procedures 
for clean urban mobility. In line with the Recharge and Refuel flagship, the Plan will allow Italy 
to  deploy  7  500  fast  public  charging  points  on  freeways  and  13  755  public  charging  points  in 
urban centers and 100 experimental charging points connected to storage, as well as at least 40 
hydrogen generation and refuelling stations for road transport). The Superbonus 110% measure 
in  component  M2C3  (energy  efficiency)  also  contributes  to  establish  private  charging 
infrastructure in renovated buildings. Finally, the Plan also envisages the end of regulated prices 
in charging infrastructure, the requirement for highway concessionaires to install charging points 
and  the  introduction  of  transparent  and  non-discriminatory  requirements  for  the  assignment  of 
public spaces for electric charging or for the selection charging point/station operators. 

The Plan aims at boosting railway infrastructure to support modal shift. Rail transport will 
be  supported  to  discourage  the  use  of  road  transport,  which  accounts  for  the  greatest  share  of 
transport  GHG  emissions.  The  Plan  envisages  significant  investments  on  the  Brescia-Padova 
(EUR 3,6 billion) and Liguria-Alps (EUR 3,9 billion) rail axes, together with an enhanced key 
connection to  the  Brenner tunnel. The RRF will add EUR 3 billion to  the EUR 10 billion that 
Italy  intends  to  devote  to  strengthening  metropolitan  nodes  and  key  national  links.  The 
deployment  of  the  European  Rail  Traffic  Management  System  (EUR  3  billion)  will  allow  to 
increase the capacity of railway services throughout Italy. Important investments on the Naples-
Bari/Palermo axes (EUR 4,8 billion) will also allow to complete the Scandinavia-Mediterranean 
freight  corridor,  facilitating  connections  with  the  important  port  of  Gioia  Tauro  and  anchor 
Puglia  and  Calabria  in  the  existing  vibrant  Italian  high-speed  network  between  Naples  and 
Milan/Venice/Turin. Finally, the Plan also envisages reforms and investments to boost regional 
railways. Through the implementation of article 27 comma 2 d) of Decree-Law 50/2017, Italian 
Regions will be provided with financial incentives to tender out their public service contracts for 
regional railways. Some EUR 3 billion will be invested in regional railways in the South, notably 
in  stations  and  electrification  (and  complementing  investments  in  zero-emission  –  electric  and 
hydrogen - trains and nine  hydrogen refuelling stations).  

The  Plan  also  envisages  investments  to  reduce  GHG  emissions  in  air  and  maritime 
transport.    Thanks  to  the  digitalisation  of  air  traffic  management,  notably  around  Rome-
Fiumicino airport, fuel consumption and GHG emissions from aircraft will be reduced. The RRF 
will  also  facilitate  the  greening  of  Italian  ports  through  investments  in  energy  efficiency  and 
centralised smoke treatment and thanks also to reforms to simplify the authorisation procedures 
to  provide  electricity  to  piers  (“on  shore  power  supply”).  These  investments  and  reforms  will 
accompany  a  major  reform  of  ports  covering  the  simplification  of  strategic  planning,  the 
introduction  of  clear,  non-discriminatory  and  transparent  criteria  for  the  award  for  concession 

66 

 
 
 
 
contracts and allowing concessionaires in big ports to merge their activities or providing some of 
the services of the port authority themselves. The Plan also strengthens its port system through 
competitive  allocation  of  concessions,  while  respecting  at  the  minimum  the  provisions  of  the 
Port Services Regulation 2017/352. 

To  reduce  GHG  emissions  from  agriculture,  Italy  plans  to  develop  investment  in 
biomethane,  renewable  energy  in  farms,  precision  farming  and  to  enhanced  logistics  for 
agri-food  supply  chains.  As  explained  previously,  the  Plan  will  support  Italy’s  reforms  and 
investments to develop biomethane, which will also help to increase renewable energy sources in 
transport.  The  Plan  envisages  to  invest  EUR  2,5  billion  in  agri-voltaic  systems  to  improve  the 
energy  efficiency  of  farms  and  to  install  solar  panels  with  intelligent  management  of  energy 
flows and accumulators. The Facility will support innovation and mechanisation of agriculture to 
develop precision farming, which will also contribute to efforts to reduce reliance on the use and 
the  risks  of  chemical  pesticides,  in  the  framework  of  the  Directive  for  Community  action  to 
achieve the sustainable use of pesticides Furthermore, investments in logistics for the agri-food 
supply chain  notably through storage facilities and digitalisation will also  help  to  reduce GHG 
emissions  from  the  agri-food  sector.  Finally,  the  Plan  includes  reforms  introducing  proper 
incentives for a sustainable use of water in agriculture (cf. infra).  

The Plan also supports Italy’s climate adaptation efforts, as well as seismic resilience and 
the  quality  of  infrastructures.  The  Plan  proposes  to  invest  EUR  2,4  billion  in  reducing 
hydrogeological  risks  and  EUR  500  million  in  the  resilience  of  electricity  networks.  The 
Superbonus  110%  measure  also  supports  anti-seismic  interventions  (under  the  so-called 
Sismabonus). Interventions will be prioritised in line with the National Risk Assessment and with 
Article  6  of  the  Decision  1313/2013  EU  and  Risk  Management  Capability  Assessment.  To 
ensure that interventions take place swiftly, the Plan envisages that Italy will implement some of 
the  recommendations  of  its  Court  of  Auditors52  on  coordination  of  interventions  between 
government levels and also between the various existing information systems. Finally, the reform 
of  highway  concessions  will  improve  incentives  to  investment  in  the  maintenance  of  road 
infrastructures,  as  well  as  its  supervision  by  the  transport  regulator  (ART)  and  the  Ministry  of 
Public Works. 

Circular economy and waste management  

Italy  is  taking  advantage  of  the  Recovery  and  Resilience  Facility  to  address  the  existing 
challenges in waste management (cf. section 2.2). The Plan proposes to invest EUR 1,5 billion 
in  the  improvement  of  waste  management  through  the  mechanisation  of  segregated  waste 
collection  and  additional  waste  treatment  facilities.  The  Plan  allows  Italy  to  embark  in  an 

52 Deliberazione 31 ottobre 2019 n17/2019. 

67 

 
 
 
 
                                                 
ambitious  reform  of  its  waste  management  by  increasing  competitive  procedures  for  public 
service contracts for waste management through the reform of local public services, simplifying 
procedures  authorising  waste  management  facilities,  providing  technical  support  to  local 
municipalities and by adopting by 2022 a National program for Waste Management, adapting the 
network  of  installations  necessary  for  integrated  waste  management,  to  reinforce  the 
coordination  of  the  national  and  regional  waste  management  programmes,  to  reduce  the 
infringement procedures against Italy and to tackle low collection of waste and landfilling. The 
Plan  contains  targets  to  reduce  the  number  of  infringements  against  Italy53  and  the  important 
regional disparities in separate collection rates.  

The Plan also fosters the circular economy through flagship projects on separate collection 
on electronic, plastic and textile waste. The Plan requires Italy to reach as targets the recycling 
rates of the Circular Economy Action Plan by 202554 as well as to apply separate collection for 
textiles  and  hazardous  waste  fractions  produced  by  households.  It  also  envisages  that  Italy 
presents  a  new  Circular  Economy  Strategy  by  2022  covering  notably  a  new  digital  waste 
traceability  system,  tax  incentives  to  support  recycling  activities  and  the  use  of  secondary 
materials, a revision of environmental taxes on waste to incentivise recycling at the expense of 
landfilling and incineration, the right to reuse and repair and a reform of the Extended Producer 
Responsibility and Consortia system. 

The Plan envisages important investments and reforms to improve water and wastewater 
management.  The  Facility  will  invest  EUR  2  billion  in  primary  water  infrastructures  for  the 
security of water supply, EUR 0,8 billion in the resilience of the irrigation agro-system, EUR 0,9 
billion  on  water  losses  and  EUR  0,6  billion  in  water  sewerage.  The  Plan  also  requires  Italy  to 
tackle the excessive fragmentation of water utilities through incentives to merge entities notably 
along  river  basins.  Finally,  the  Plan  includes  reforms  introducing  proper  incentives  for  a 
sustainable  use  of  water  in  agriculture,  notably  through  the  use  of  the  common  monitoring 
system for water uses (SIGRIAN).  

Mission  2  Component  4  also  contains  some  measures  aiming  to  support  biodiversity 
protection.  It  covers  measures  to  support  research  and  monitoring  activities  linked  to  the 
restoration  of  marine  resources  (EUR  400  million),  the  development  of  urban  and  peri-urban 
forests (EUR 330 million) and the “re-naturification” of parts of the Po area (EUR 357 million).  

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  the  recovery  and 
resilience  plan  is  expected,  to  a  large  extent,  to  make  a  significant  contribution  to  the  green 

53  Infringements  NIF  2003/2077  must  be  reduced  by  80%  in  2024  and  by  90%  in  2025;  infringements  NIF 
2011/2215 must be reduced by 60% in 2024 and 75% in 2025. 
54  

68 

 
 
 
 
 
 
                                                 
transition  to address  the challenges resulting  from it and ensures that at least 37% of  its  total 
allocation contribute to the climate target. This would warrant a rating of A under criterion 2.5 
of Annex V to the RRF Regulation. 

4.6. Digital transition  

This  section  assesses  whether  and  to  which  extent  the  proposed  measures  fulfil  the  elements 
corresponding  to  assessment  criterion  2.6  of  Annex  V  to  the  RRF  Regulation.  In  particular,  it 
assesses whether the methodology for digital tagging set out in Annex VII to the RRF Regulation 
has been applied correctly  and whether the measures in  the Recovery  and Resilience Plan that 
effectively contribute to the digital transition or to addressing the challenges resulting there from 
it, account for an amount which represents at least 20% of the Plan’s total allocation.  

Digital tagging 

The  main  mission  contributing  to  the  digital  transition  is  Mission  1  on  ‘Digitalisation, 
innovation  and  economic  competitiveness  and  culture”  (overall  estimated  value:  EUR  40 
291 million). This mission contains a vast array of measures contributing to the digital transition 
estimated  at  around  EUR  28  276  million  and  representing  58,8%  of  the  plan’s  digital  target. 
Several measures in this mission contribute towards the digital transition through a broad range 
of interventions, stretching from measures aiming at enhancing connectivity to measures aimed 
at improving the digitalisation of public administration and businesses. 

Component  M1C1  ‘Digitalisation,  innovation  and  security  in  the  public  administration’ 
(overall estimated value: EUR 9 722 million) contains measures contributing to the digital 
target for a total estimated amount of EUR 7 050 million. This component includes measures 
for a total of EUR 6 143 million notably aimed at (i) equipping the public administration with 
advanced  digital  infrastructures,  fostering  the  uptake  of  cloud  solutions  and  strengthening 
cybersecurity;  (ii)  rationalising  and  harmonising  public  administration’s  data  centers;  (iii) 
ensuring interoperability of public administration’s databases in  view of the implementation  of 
the  “Once  Only  Principle”  and  the  accessibility  of  data  through  a  catalogue  of  Application 
Programming Interfaces (APIs); (iv) improving the availability, efficiency and accessibility of all 
digital  public  services,  tackling  the  digital  divide  and  strengthening  citizens’  digital  skills.  In 
addition,  the  third  axis  of  component  M1C1  on  the  ‘Organisational  innovation  of  the  Judicial 
System’  contains  measures  estimated  at  EUR  2,3  billion  aimed  at  strengthening  the 
administrative and digital capacity of the judicial offices, also in view of further supporting the 
digitalization of judicial procedures.  

Component  M1C2  ‘Digitalization,  Innovation  and  Competitiveness  of  the  Production 
System’  (overall  estimated  value:  EUR  23  895  million)  contains  a  significant  number  of 
measures contributing to the achievement of the digital target, for a total amount estimated 
at EUR 20 395 million. This component includes in particular (i) measures contributing to the 
digital target for a total of EUR 11 422 million, aimed at supporting the digital transition and the 

69 

 
 
 
innovation  of  the  production  system  through  incentives  to  investments  in  cutting-edge  and  4.0 
technologies,  research,  development  and  innovation;  (ii)  measures  contributing  to  the  digital 
target  for  a  total  of  EUR  8,194  million,  aimed  at  fostering  and  facilitating  the  widespread 
deployment  of  very  high  capacity  networks,  including  5G  and  fiber,  and  space-related 
initiatives;(iii) measures contributing to the digital target for a total of EUR 780 million, aimed at 
promoting the development of innovative production chains and increase the competitiveness of 
Italian companies.  

Component M1C3 ‘Tourism and culture 4.0’ (overall estimated value: EUR 6 675 million) 
also  contains  measures  contributing  to  the  achievement  of  the  digital  target,  for  a  total 
estimated amount of EUR 830 million. This includes the development of a national plan for the 
digitisation of cultural heritage, a digital identity certification system for cultural heritage, cloud 
infrastructure, software infrastructure services for cultural heritage, a tourist digital hub, as well 
as capacity building for culture operators to manage the digital transition. 

The second mission that significantly contributes to the achievement of the digital target is 
Mission 4 on ‘Education and research’ (overall estimated value: EUR 30,876 million). This 
mission contains measures contributing to the digital target for a total estimated amount of EUR 
7  483  million,  representing  15,6 %  of  the  plan’s  digital  target.  Measures  contributing  to  the 
achievement of the digital target included under component M4C1 ‘Strengthening the provision 
of education services: from crèches to universities’ and estimated at EUR 3 673 million in total 
include, in  particular, the investment  in  Schools 4.0, the investment  on digital  teaching  and on 
training  on  the  digital  transformation  for  school  staff  as  well  as  the  measure  on  teaching  and 
advanced  university  skills.  Measures  contributing  to  the  achievement  of  the  digital  target 
included  under  component  M4C2  ‘From  research  to  business’  and  estimated  at  EUR  2  464 
million  in  total  include,  in  particular,  the  establishment  of  a  fund  for  the  construction  of  an 
integrated  system  of  research  and  innovation  infrastructures  and  the  measure  related  to  the 
partnerships extended to universities, research centres, companies and funding of basic research 
projects. 

The third mission that significantly contributes to  the achievement of the digital target is 
Mission 6 on ‘Health’ (overall estimated value: EUR 15,626 million).  This mission contains 
measures  contributing  to  the  digital  target  for  a  total  amount  equal  to  EUR  4  403  million, 
representing  9,2 %  of  the  plan’s  digital  target.  These  measures  are  included  notably  under 
component M6C2 ‘Innovation, research and digitalisation of the national health service’, such as 
the  digital  update  of  hospitals’  technological  equipment (EUR  4  052  million)  and  investments 
aimed  at  strengthening  the  technological  infrastructure  and  the  tools  for  data  collection,  data 
processing, data analysis and simulation at central level of the Italian health system for improved 
efficiency in planning and deployment of healthcare services (estimated at EUR 1 673 million). 
The investment ‘homecare as a first point of assistance for citizens’ under component M6C1 also 
contributes  to  the achievement of the digital  target  for a total  estimated amount of EUR 1 600 
million.  

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The three other missions, Mission 3 on ‘Infrastructure for sustainable mobility’, Mission 5 
on ‘Inclusion and cohesion’ and Mission 2 on ‘Green revolution and ecological transition’ 
also  contain  measures  contributing  to  the  achievement  of  the  digital  target,  estimated 
respectively at EUR 3 330 million (6,9% of the plan’s digital target), EUR 2 695 million (5,6% 
of the plan’s digital target) and EUR 1 908 million (4,0 % of the plan’s digital target). 

In sum, the Plan contains measures that effectively contribute to the digital transition that 
account for an amount of EUR 48 094million to the digital transition, which, based on the 
methodology  for digital  tagging set  out  in  Annex VII to  the RRF Regulation  would represent 
25,1 % of the plan’s total allocation in grants and loans.  The digital contribution of each of 
the components of the recovery and resilience plan of Italy is set out in Table 4.5.3. 

Table  4.5.3:  %  digital  contribution  by 
component. Component 

M1C1. Digitalisation, innovation and security in the PA 
M1C2.  Digitalisation,  innovation  and  competitiveness  of  the 
production system 

M1C3. Tourism and culture 4.0 

M2C1. Circular economy and sustainable agriculture 
M2C2.  Renewable  energy,  hydrogen,  grid  and  sustainable 
mobility 

M2C3. Energy efficiency and renovation of buildings 

M2C4. Protection of land and water resources 

M3C1. Investments in the rail network 

M3C2. Intermodality and integrated logistics 
M4C1. Strengthening the provision of education services:from 
crèches to universities  

M4C2. From research to business 

M5C1. Employment policies 
M5C2.  Social  infrastructure,  households,  the  community  and 
the third sector  

M5C3. Special interventions for territorial cohesion 
M6C1.  Local  networks,  facilities  and  telemedicine  for  local 
health care  
M6C2.  Innovation,  research  and  digitalisation  of  the  national 
health service  
Total 

Digital transition 

Cost 
(EUR million) 

Digital 
(EUR million) 

contribution 

Digital 
(percentage) 

contribution 

          9 722  

          7 050  

        23 895  

          6 675  

          5 265  

        23 778  

        15 362  

        15 054  

        24 767  

             630  

        19 436  

        11 440  

          6 660  

        11 216  

          1 975  

        20 395  

             830  

             446  

          1 444  

               -    

               18  

          2 970  

             360  

          3 573  

          3 910  

          2 420  

             275  

               -    

          7 000  

          1 280  

          8 626  

      191 499  

          3 123  

        48 094  

3,7% 

10,7% 

0,4% 

0,2% 

0,8% 

0,0% 

0,0% 

1,6% 

0,2% 

1,9% 

2,0% 

1,3% 

0,1% 

0,0% 

0,7% 

1,6% 

25,1% 

The  Plan  is  expected  to  contribute  to  Italy’s  digital  transition  and  overall  it  seems  to  be 
aligned  with  key  objectives  of  the  Digital  Strategy  of  the  Union  and  with  the  priorities 
related  to  digital  set  out  by  the  Commission  in  the  2021  Annual  Sustainable  Growth 
Strategy.  These  measures  support  the  European  Flagships  ‘Connect’,  ‘Modernise’,  ‘Scale-up’ 
and ‘Reskill and upskill’. The plan encompasses a wide range of measures aimed at (i) enhancing 
connectivity,  by  accelerating  the  deployment  of  very  high  capacity  networks,  in  particular  5G 

71 

 
 
 
 
and  fibre  networks;  (ii)  improving  the  digitalisation  of  public  administration,  the  justice,  the 
health and the education systems as well as culture and tourism; (iii) fostering the digitalisation 
of Italian businesses with focus on industry 4.0 and (iv) addressing the human capital dimension, 
including  basic  digital  skills  and  new  skills  for  students  and  the  workforce;  (v)  supporting, 
although  to  a  more  limited  extent,  the  development  and  deployment  of  advanced  digital 
technologies. 

Overall,  these  measures  are  expected  to  contribute  to  improving  the  competitiveness  and 
resilience of the Italian economy, while ensuring inclusiveness.  In addition, these measures are 
expected to bring a transformational change and have a lasting impact.  

Connectivity 

Italy  is  taking  advantage  of  the  Recovery  and  Resilience  Facility  to  achieve  the  2030 
European Digital Targets in connectivity. The broadband investment  measure in Component 
M1C2,  amounting  to  EUR  3,8  billion,  aims  at  bringing  gigabit  connectivity  to  grey  areas  and 
scattered households in  black areas. In the framework of the Italian Ultra-Broadband plan, and 
with  complementing  national  resources,  those  actions  if  effectively  implemented  should 
guarantee  the  goal  of  providing  all  households  with  Gigabit  connectivity  by  2030.  Additional 
sub-measures (amounting to  EUR 0,8 billion) aim  at  ensuring  connectivity at Gigabit speed to 
public schools, hospitals and remote islands. The plan is also expected to boost coverage of 5G 
networks. In particular, it envisages investments in market failure areas (M1C2, EUR 2 billion) 
to  bring  5G  connectivity  to  all  households.  Additional  interventions  for  EUR  420  million  are 
planned to realise 5G corridors (to facilitate the introduction of autonomous driving) along 2 645 
Km of roads (some across-borders) and to bring 5G coverage to 10 000 Km of extra-urban roads 
(EUR 600 million). Finally, the measures for capillary 5G coverage are extended to local rural 
communties  in  order  to  support  more  efficient  public  services.  The  investments  are  ambitious 
and  take  into  account  the  specificity  of  the  Italian  landscape;  their  fast  implementation  would 
lead  to  significant  benefits  by  building  the  key  enabling  conditions  for  a  widespread  digital 
transition across the economy and society. 

Digitalisation of businesses 

The  Plan  addresses  digitalization  of  businesses  by  focusing  on  stimulating  the  uptake  of 
industry 4.0 technologies. In particular, component M1C2 includes ‘Transizione 4.0’, a system 
of  tax  credits  aimed  at  supporting  and  accelerating  the  digital  transformation  of  Italian 
companies.  The  scheme  is  based  on  an  existing  measure,  which  was  however  significantly 
modified and extended in its scope, also as a response to the COVID-19 crisis. The share of the 
scheme financed under the RRF, worth EUR 13,4 billion in total, includes tax credits for i) 4.0 
tangible  assets  (EUR  8,9  billion),  (ii) 4.0  intangible  assets  (EUR  1,9  billion),  (iii) 4.0  training 

72 

 
 
activities  (EUR  0,3  billion),  (iv)  traditional  intangible  capital  goods  (EUR  0,3  billion)  and  (v) 
R&D&I (EUR 2,0 billion)55. 

The effective implementation of digital transformation processes requires a comprehensive 
action  which  puts capacity building at the core of investments.  The Transition  4.0 measure 
supports the acquisition of 4.0 tangible and intangible goods as well as, to some extent, training 
on  digital  skills.  In  the  implementation  phase,  a  truly  transformative  effect  can  be  obtained  by 
linking the acquisition of capital goods with investments for the reskilling and upskilling of the 
workforce,  including  the  upskilling  of  business  owners,  and  the  offering  of  apprenticeships 
opportunities  for  young  people.  Strengthening  cybersecurity  capacities  in  connection  with 
technology  investments  is  another  important  factor  to  take  into  account  in  the  implementation 
phase (see also section 4.11). 

Other measures on digital aspects in the Plan. Apart from “Transition 4.0”, digital aspects are 
included in measures aiming at promoting the development of innovative production chains and 
the  competitiveness  of  Italian  companies  (M1C2,  EUR  1  900  million)  or  in  measures  with  a 
sectorial scope (e.g. in the field of agriculture, under M2C1, EUR 160 million). Measures also 
partly support the digital transition of the audio-visual sector (M1C3, EUR 155 million). 

The Plan also includes measures to strengthen support services and collaboration between 
businesses,  universities  and  research  centers.  Measures  envisaged  in  Component  M4C2 
support the uptake of digital technologies by enterprises by strengthening of technology transfer 
centers  such  as  existing  competence  centers  and  the  network  of  European  digital  innovation 
hubs,  and  encouraging  collaboration  between  Universities,  research  centers  and  businesses 
(totalling around EUR 1,7 billion). 

Human Capital 

The Plan envisages investments to reduce the digital skill gap among the Italian population, 
as a condition to strengthen social inclusion.  The digital needs of the general population and 
of  people  at  risk  of  exclusion  are  addressed  by  the  Component  M1C1  EUR  135  million 
investment  in  a  network  of  2  400  Digital  Facilitation  Services  nodes,  which  are  access  points 
providing in person and online training on digital skills. It is expected that the actions of these 
nodes will be reinforced by ESF+ funds and will be coordinated in the framework of the National 
Strategy for digital skills.  In addition, the Plan strengthens the “Digital Civic Service” (M1C1, 
EUR  60  million),  an  initiative  that  will  mobilise  young  Civic  service  Volunteer  for  projects 
dedicated to train persons at risk of digital exclusion (in particular the elderly). 

Advanced digital skills development is addressed as part of broader measures to support a 
labour  market  in  transition.    The  Plan  will  contribute  to  improve  the  academic  offer  in  the 

55 Tax credits for traditional intangible goods and for R&D&I do not concur to the digital target. 

73 

 
 
                                                 
field of digital technologies and increase the capacity of the higher-education system to provide 
digital  education  to  university  students  and  workers  (M4C1,  EUR  500  million).  Moreover,  the 
plan will finance Ph.D. courses in new technologies to meet the needs of innovative enterprises, 
which  will  finance  part  of  the  costs  (M4C2,  EUR  600  million,  of  which  EUR  240  million 
contributing to digital).  

The  Plan  includes  an  ambitious  reform  of  the  Public  Employment  Services  (M5C1,  EUR 
4,4 billion), which include digital skills for the jobs of the 21st century. Measures to boost the 
dual  system  (by  providing  apprenticeship  opportunities)  and  promote  the  civil  service  among 
young people can boost the acquisition of skills related to digital technologies and promote the 
entry of young people in the labour market,  the impact on the digital transition will depend on 
how these measures will be implemented. Dedicated targets have been introduced to monitor the 
number  of  people  benefiting  from  training  in  digital  skills  supported  by  Guaranteed 
Employability of Workers (GOL), with the aim of training 300 000 people specifically in digital 
skills over a total of 800 000.  

Further measures in the Plan are aimed at ensuring digital skills training for personnel of 
the  public  sector.  As  part  of  the  investments  and  reforms  for  the  digitalisation  of  the  public 
administration,  the  plan  will  set-up  a  system  of  Massive  Open  Online  Courses  on  key 
competences including digital  skills  for civil servants  (M1C1, EUR 139 million). For teachers, 
Component M4C1 provides for training on digital skills and digital teaching EUR 800 million in 
the framework of the National Digital School Plan. Finally for doctors, in the framework of the 
strengthening of the Electronic Health Record (EHR), training support in helping them feed the 
EHR is provided in Component M6C2 (EUR 300 million). 

E-governement and digital public services 

The Plan envisages an ambitious programme of digitalization of the public administration. 
In Component M1C1 planned investments  for EUR 1,9 billion are envisaged to  build a secure 
national cloud infrastructure for the public administration and the migration of local and central 
public  administration’s  IT  system  to  a  cloud-based  system  for  a  more  efficient  and  secure 
delivery  of  public  services.  Measures  for  an  additional  EUR  2,0  billion  are  envisaged  for  the 
improvement  of  online  public  services  fruibility  (interoperability,  accessibility  and  mobile 
options) and for completing key digital platforms like SPID and ANPR (i.e. eID and population 
registry). EUR 623 million are planned for reinforcing cybersecurity, including the establishment 
of  a  new  National  Cyber  Security  Agency,  which  will  be  also  in  charge  of  supporting  the 
development of cybersecurity firms in Italy. Finally, the Plan envisages the reinforcement of the 
digital back-office and front-office of main central public administrations (EUR 611 million). 

Additional sectoral investments are planned to support the digitalization of justice, mainly 
within the reinforcement of “the office of the trial”, which has among its tasks the digitalization 
of court files (EUR 2,3 billion in M1C1).  

74 

 
 
In the health sector, the Plan aims to address the covid-related challenges by investing on 
the  completion  of  the  Electronic  Health  Record  (EHR),  its  interoperability  across  regional 
health  systems  and  on  the  exploitation  of  data  generated  by  its  usage  for  the  improvement  of 
health  risks  monitoring  (M6C1,  EUR  1,6  billion).  Investments  in  telemedicine  solutions  and 
digital  upgrades  of  hospitals  and  diagnostic  equipment  will  complement  the  EHR  investment 
(M6C1 and M6C2, EUR 2,6 billion). 

In  the  education  sector,  Italy  plans  to  complement  the  measures  included  in  the  plan  (M4C1, 
EUR  2,1  billion)  with  the  support  under  other  Union  programmes  (ERDF,  REACT-EU)  and 
national  resources  to  realize  the  digitalization  of  classrooms,  administrative  processes  and 
internal cabling. 

Measures  for  digitalisation  also  cover  the  culture  and  tourism  sectors,  with  the  launch  of  a 
strategy and platform for the digitalisation of cultural heritage and a digital tourism hub as a “one 
stop shop” both for tourists and tourism operators.  

Lastly,  the  plan  envisages  the  extension  of  coverage  of  the  European  Rail  Transport 
Management  System  (ERTMS)  to  3  400  Km  of  rail  network.  The  ERTMS  will  allow 
interoperability  with  other  European  rail  networks  and  an  improvement  of  the  performance  of 
railways systems in terms of safety, capacity and maintenance. 

Investment in digital capabilitiesand deployment of advanced technologies 

The Plan includes some investments in digital capabilities  and the deployment of advanced 
technologies.  An important  measure  aims at  supporting the  development of the strategic value 
chain of microelectronics by investing in Silicon Carbide substrates, which is a necessary input 
for the manufacturing of semiconductors and a key enabler of electric mobility and solar power 
conversion (M1C2, EUR 340 million) The measure would contribute to Europe’s open strategic 
autonomy.  Other  investments  in  advanced  digital  technologies  are  related  to  the  cloud 
infrastructure for the public administration (described above).  

Large investment in the Space Economy aims to increase the digital technology capacity of 
Italy.  The  SatCom  sub-measure  (M1C2,  EUR  385  million)  aims  to  develop  a  secure  (with 
quantum  key  distribution)  system  of  telecommunication  satellites  in  emergency  conditions. 
Another sub-measure aims to increase the capability for advanced earth observation (EUR 417 
million)  with  a  new  satellite  constellation  whose  outputs  will  also  be  available  on-demand  for 
third  parties.  Another  sub-measure  (EUR  235  million)  plans  for  an  upgrade  of  the  satellite 
manufacturing  process  according  to  the  Industry  4.0  paradigm.  Finally,  the  last  sub-measure 
(EUR 450 million) aims to increase the capability for tracking space debris also through the use 
of artificial intelligence. 

Digital-Related Investment in R&D 

75 

 
 
The Plan includes some measures aimed at promoting R&D in the field of advanced digital 
technologies. The measure on national leaders on key emerging technologies (M4C2, EUR 1,6 
billion) envisages investing in national research centres on some key digital technologies (such 
as AI, HPC, Quantum, depending on the results of competitive calls for proposals). The support 
to  R&I  Partnerships  (M4C2,  EUR  200  million)  might  include  the  partnerships  on  Key  Digital 
Technologies  and  HPC.  The  Plan  envisages  funding  support  for  approved  and  potential  IPCEI 
projects  (M4C2,  EUR  1,5  billion)  and  some  of  the  funding  is  expected  to  support 
Microelectronics and on Next Generation Cloud Infrastructure and Services.  

Conclusion 

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  the  Recovery  and 
Resilience  plan  is  expected,  to  a  large  extent,  to  make  a  significant  contribution  to  the  digital 
transition or to address the challenges resulting from it and ensures that at least 20% of its total 
allocation  contribute  to  support  digital  objectives.  This  would  warrant  a  rating  of  A  under 
criterion 2.6 of Annex V to the RRF Regulation. 

4.7. Lasting impact of the plan  

Strengthening administrative capacity is key to  unleash the full potential of the investment and 
reform programme.  

A  wide  range  of  reforms  planned  in  crucial  policy  areas  are  expected  to  address 
longstanding  bottlenecks  and  to  accelerate  project  implementation.  The  reform  and 
investment agenda will be managed through a two-staggered approach. The initial focus will be 
on streamlining administrative processes and other urgent measures, to be adopted before 2022, 
to prevent process bottlenecks to impede investment activity and the full and timely absorption 
of RRF funding going forward. The second pillar concerns the implementation of key structural 
reforms, which will be ensured through the adoption of primary and secondary legislation in the 
period  after  2022.  The  impact  of  both  types  of  reforms  is  expected  to  far  outlast  the 
implementation phase of the Plan.  

An  effective  public  administration  is  key  for  a  successful  implementation  of  the  Plan.  A 
better functioning of the public administration will support the implementation of the Plan and 
raise  the  quality  and  supply  of  public  services.  This  will  benefit  both  firms  and  citizens  and 
particularly  at  the  local  level  and  in  the  South,  thus  also  addressing  the  territorial  divide.  The 
reform  of  public  employment  and  its  recruitment  process  will  better  prepare  staff  and 
decisionmakers for pending challenges and help tailor public services closer to the needs of firms 
and  citizens.  An  ambitious  simplification  agenda,  inter  alia  targeted  at  shortening  and 
simplifying  tender  procedures  and  coupled  with  sizeable  investment  in  digital  solutions,  will 
significantly  increase  the  pace  and  improve  the  effectiveness  of  the  public  administration.  The 

76 

 
 
 
 
 
above-mentioned  reform  measures  will  be  crucial  for  a  sound  implementation  of  the  Plan  but 
also  benefit  the  general  business  environment  and  thus  develop  positive  and  lasting  effects  far 
beyond the horizon of the Plan.  

Fiscal-structural reforms are expected to improve the sustainability of public finances and 
support growth. The reform of the spending review is likely to to increase efficiency and shift 
public  spending  toward  a  more  growth-friendly  composition.  In  addition,  the  financial 
programming  capacity  and  the  fiscal  discipline  of  the  central  administration  set  to  be 
strengthened, while making   the overall quantity and quality of public services more transparent. 
The  completion  of  the  reform  of  fiscal  federalism  is  expected  to  improve  the  transparency  of 
fiscal relations among the various levels of government and promote spending efficiency at the 
subnational level. The introduction of an accrual  accounting system  for all layers of the public 
administration is likely to facilitate the monitoring of public finances. Finally, the reform of the 
tax administration is expected to strengthen tax compliance and improve the effectiveness of the 
targeting of audits and controls, thus reinforcing the fight against tax evasion. 

The  green  and  digital  transition  and  investments  in  the  education  and  research  system  are 
expected to raise productivity and potential growth. 

The  green  transition  helps  achieving  a  growth  path  that  is  resilient,  inclusive  and 
sustainable.  Investments  in  renewable  energies,  energy  efficiency,  water  management  and 
environmental  protection  are  designed  to  contribute  to  sustainability  and  to  the  fight  against 
climate change. A total of EUR 70.9 billion of the Plan is allocated to green investment and set 
to  scale  up  the  pace  of  the  green  transition.  These  investments  will  pay  off  in  the  long  term 
through  fuel  savings  and  low  levels  of  pollution resulting  from  low-emission  technologies  and 
modern, smart and clean infrastructure. Moreover, the Plan offers new opportunities to exposed 
businesses  and  households,  especially  in  vulnerable  regions  and  communities,  to  ensure  a  just 
transition. 

Firms  and  citizens  stand  to  benefit  from  increased  investment  in  digitalisation,  as  new 
technologies  are  key  to  providing  economic,  social  and  environmental  sustainability. 
Digitalisation is viewed as a technology or supply shock with profound efficiency, productivity 
and employment effects and the intensified use of digital technologies is set to change the way 
how  governments,  business  and  citizens  interact.  Given  that  the  uptake  of  digital  solutions 
among  citizens  and  businesses  is  still  relatively  low  at  the  outset  of  the  plan,  the  long-term 
impact of digital investment is expected to be substantial. The Plan allocates EUR 48 066 million 
to  digital  investments  across  a  wide  range  of  sectors  and  might  crowd-in  further  private 
investment,  with  positive  effects  beyond  the  immediate  economic  impact.  To  ensure  a  lasting 
impact of measures to strengthen digitalisation of productive sectors, it is also important to create 

77 

 
 
 
 
 
 
strong links between investments in digital technologies by businesses, training and employment 
policies (e.g. apprenticeship opportunities). 

Planned reforms and investments in the education and research sectors have the potential 
to  enhance  the  quality  of  human  capital  in  the  long  run.  The  Plan  includes  measures  to 
increase  the  quality  of  primary  and  secondary  education,  in  particular  by  raising  the  minimum 
requirements  to  access  the  teaching  profession  and  by  providing  training  to  existing  teaching 
staff to  give the next  generations a thorough understanding of the twin  transition.  The reforms 
that  target  tertiary  education,  envisage  the  overhaul  of  degree  groups  and  Ph.D  programmes, 
while  the  research  sector  will  strive  for  greater  mobility  between  private  and  public  research 
centers.  These  measures  supported  by  significant  investments  in  fostering  new  research 
initiatives  are  expected  to  sizeably  improve  the  average  level  of  education  of  younger 
generations and thus the quality of human capital also beyond the horizon of the Plan. Moreover, 
the pace of the development and diffusion of new technologies is set to rise and make the Italian 
economy more competitive. 

Effective structural reforms are set to compound and sustain the investment stimulus. 

Structural  reforms  are  set  to  deliver  positive  long-term  supply  effects  by  enhancing 
efficiency through more intensive competition. Reforms to the labour market with the aim to 
raise participation rates or measures to boost competition are expected to increase labour supply 
and  generate  efficiency  gains.  In  practice,  the  plan  inter  alia  envisages  to  improve  the  overall 
business  environment  by  reducing  barriers  to  competition  through  Annual  Competition  Laws. 
Through  the  reinforced  use  of  competitive  bidding  procedures  to  assign  service  contracts 
efficiency  in  sectors  such  as  transport  and  water  management  are  expected  to  structurally 
improve.  The  phase-out  of  regulated  prices  and  enhanced  competition  in  retail  energy  market 
will benefit consumers and make businesses more competitive. Higher competition at home will 
also be likely to help Italian business to maintain or gain a competitive edge abroad. 

The  Plan  will  put  contracting  authorities’  relationship  with  private  businesses  on  a  new 
and mutually beneficial footing. Public procurement is a prerequisite for economic growth and 
public  investment.  The  Plan  will  overhaul  public  procurement  procedures  in  a  comprehensive 
way, from initiating tender procedures, through awarding public supply contacts  to the timelier 
settlement of payments. As a result, the improved offer and quality of public services will better 
meet the public’s needs and support the transparency and efficiency of public expenditure, also 
contributing to greater social accountability. Furthermore, it creates an enabling environment for 
private sector-led growth, serving as a catalyst for private sector development by opening access 
to  business  opportunities,  improving  the  business  and  investment  environment,  enhancing 
competition and promoting economic growth. Transparent and efficient procurement procedures 
and  the  timely  payment  of  suppliers  will  help  the  public  administration  to  achieve  value  for 

78 

 
 
 
 
 
 
money  and  maximise  the  outcome  for  citizens  in  terms  of  enhanced  human  welfare  and 
economic growth,  while providing firms  with higher predictability of investment decisions and 
cash inflows and supporting business development. 

Reforms to the justice system will strengthen legal certainty and support structural change 
on a long-term basis.  Planned reforms,  including to  the internal  organization of the judiciary, 
have  the  potential  to  reduce  procedural  backlogs  and  the  length  of  civil  proceedings,  thus 
providing  greater  legal  certainty  and  predictability  of  legal  decisions.  For  example,  this  will 
provide firms and investors with greater planning reliability in the case of insolvency procedures 
and help firms and investors to free locked-in capital, which can then be used for in the long term 
more  productive  business  endeavours.  Moreover,  the  reduction  in  the  length  of  criminal 
proceedings  is  expected  to  step  up  the  fight  against  corruption.  These  structural  measures  are 
likely  to  support  corporate  investment  growth  also  far  beyond  the  end  of  the  Plan 
implementation. 

The Plan is expected to help the Italian economy recover from the pandemic shock and cope with 
the profound longer-term structural challenges that the COVID-19 pandemic has intensified. 

The measures included in the plan address the structural investment gap and the roots of 
longstanding  structural  impediments  to  growth.  The  swift  adoption  of  measures  to  remove 
bottlenecks to investments, additionally buttressed by ongoing technical support provided by the 
Commission  and inspired by best  practices, is  set  to  ensure  an effective implementation  of the 
Plan  by  2026.  Horizontal  reforms,  such  as  the  ones  in  public  administration,  justice,  fiscal 
structural,  business  environment  and  education  address  impediments  to  long-term  growth,  as 
identified  by  the  Country-specific  Recommendations  of  2019  and  2020.  They  are  designed  to 
tackle the various determinants of low competitiveness and sluggish productivity growth of Italy. 
Furthermore, the investment programme set out in the Plan addresses the need for more public 
investment  in  crucial  areas  such  as  health,  transport,  energy  generation  and  distribution  and 
provides further support to businesses to successfully face the challenges and reap the benefits of 
the green and digital transition. 

Overall, the Plan represents a comprehensive and ambitious set of reforms and investments 
whose impact is expected to extend beyond the initial implementation period. The impact of 
productivity-enhancing  reforms  and 
the 
implementation  period.  Structural  reforms  require  time  to  implement  but  are  likely  to  provide 
substantial long-term gains in terms of higher productivity and growth potential. The same is true 
for productive investments whose demand-stimulating effect in the short term is superseded by 
supply  effects  in  the  long  term.  According  to  Commission  estimates,  the  Plan  is  expected  to 
generate  a  significant  growth  effect.  This  is  expected  to  lift  the  Italian  economy  into  a  higher 

to  fully  unfold  beyond 

investment 

likely 

is 

79 

 
 
 
 
 
 
growth path, with real GDP 2,6% higher by 2026 compared with a scenario without recovery and 
resilience plan, which will be sustained in the medium and long term. 
Taking  into  consideration  all  reforms  and  investments  envisaged  by  Italy  in  its  recovery  and 
resilience  plan,  their  implementation  is  expected,  to  a  large  extent  to  bring  about  a  structural 
change  in  the  administration  and  in  relevant  institutions  and  to  have  a  lasting  impact.  This 
would warrant a rating of A under criterion 2.7 of Annex V to the RRF Regulation. 

4.8  Milestones, targets, monitoring and implementation  

Adequacy  of  the  structure  tasked  with  the  implementation  of  the  plan,  monitoring  of  progress 
and reporting 

The envisaged monitoring and reporting mechanisms are well defined and in line with the 
intended purposes.  In addition  to  the ordinary system required by national  regulations for the 
correct  use  of  financial  resources,  the  plan  provides  for  specific  mechanisms  and  procedures 
targeted  to  the  peculiarities  of  the  Recovery  and  Resilience  Facility.  In  particular,  the  correct 
fulfilment  of  milestones  and  targets  is  monitored  and  assessed  notably  through  the  functions 
assigned  to  the  technical  coordination  structures,  based  on  data  provided  by  the  owners  of  the 
measures  at  local,  regional  and  central  level.  These  technical  coordination  structures  refer  to 
those defined at the level of the central administrations responsible for the measures as well as to 
the central coordination structure established at the Ministry of Economy and Finance (in charge 
of  control  and  reporting,  also  in  view  of  submitting  payment  requests  to  the  European 
Commission).  An  independent  Audit  Body  will  then  verify  the  fulfilment  of  milestones  and 
targets  and  the  quality  of  the  underlying  data,  ensuring  the  retention  of  audit  documents  and 
records  as  well  as  their  outcomes.  Finally,  the  monitoring  system  will  benefit  from  a  new 
integrated IT system (“ReGiS”) aimed at guaranteeing the electronic collection and exchange of 
data planned to be introduced in 2022; until then, the current systems used in the context of the 
ESI  funds  will  be  used  and  adequately  adapted  to  the  characteristics  of  the  Recovery  and 
Resilience Facility.  In particular, these systems  will monitor the progress and the fulfilment of 
milestones  and  targets  through  the  creation  of  reporting  dashboards  based  on  data  collected  in 
centralized databases.  

Milestones, targets and indicators 

The  set  of  milestones  and  targets  of  the  Italian  plan  is  broad  and  is  appropriate  for 
monitoring the plan’s implementation. The milestones and targets of the Italian plan appear to 
be  sufficiently clear,  realistic  and  with  a  good  degree  of  ambition.  They  are  designed 
to adequately reflect  all  the  investments  and  reforms  envisaged  in  the  plan,  including  the  most 
relevant  phases  for  their  adoption  and  implementation.  The  suggested  indicators  seem  to  be 
relevant,  acceptable  and  sufficiently  robust.  On  the  one  hand,  targets  are  mostly  quantitative, 
output-related,  specific  and  relevant.  On  the  other,  milestones  cover  the  key  phases  in  the 

80 

 
 
 
 
 
 
adoption of reforms and preparatory steps for the launch of investment. The overall high number 
of  milestones  and  targets is  considered  to  be justified in  light  of the  size  and  complexity  of the 
plan and they appear well distributed throughout the Facility’s horizon.  
In  general,  the  milestones  and  targets  of  the  plan  appear  relatively  well  distributed 
throughout the Facility’s lifetime. In 2026 there is a peak in the number of targets, due to the 
nature  of  some  investment  which  require  time  to  be  completed,  such  as  for  transport 
infrastructure, the extent of some investment involving a large number of operators and the final 
targets for the completion of most projects. Milestones and targets for reforms are frontloaded. 
Concerning  investments,  milestones  and  targets  are  backloaded  for  loans  and  rather  flat  for 
grants. 

Overall organisational arrangements  

The proposed arrangements identify clearly the bodies responsible for the monitoring and 
implementation of the plan and define their competences and duties.  A steering committee 
(“cabina di regia”) is established at the Presidency of the Council of Ministers with the main task 
to  steer  and  monitor  the  overall  implementation  of  the  plan.  Moreover,  a  consulting  body  for 
social dialogue, composed of representatives of local and regional authorities, social partners and 
other relevant stakeholders, is set-up. At technical level, a secretariat to support the activities of 
the steering committee and the consulting body is established at the Presidency of the Council of 
Ministers, together with a regulatory quality unit tasked with the identification of implementation 
bottlenecks  stemming  from  regulatory  issues  and  with  the  development  of  solution  proposals. 
Importantly,  a  central  coordination  structure  is  established  at  the  Ministry  of  Economy  and 
Finance.  The  structure  is  organised  in  operational  units  with  specific  tasks  and  duties  with  the 
aim to perform the operational coordination and monitoring of the plan (including in relation to 
milestones  and  targets),  the  control  of  the  regularity  of  procedures  and  expenses  and  the 
reporting, and the technical and operational support to the implementation phases of Plan. This 
centralised  structure  acts  as  a  single  point  of  contact  at  national  level,  as  well  as  in  the 
interactions  with  the  European  Commission.  In  addition,  an  Audit  Body  is  established  for  the 
internal control system, to verify the fulfilment of milestones and targets as well as to protect the 
financial interests of the Union; its independence is ensured through an adequate segregation of 
functions. Finally, it is envisaged that coordination structures are identified at the level of each 
central  administration  responsible  for  measures  included  in  the  plan,  tasked  with  the 
management,  monitoring,  reporting  and  control  on  the  relevant  interventions,  including  in 
relation to the supervision of implementation and progress towards the fulfilment of milestones 
and  targets.  Enforcement  mechanisms  in  case  of  implementation  issues,  including  through  the 
activation of substitution powers vis-à-vis the administrations responsible for the measures of the 
plan, are introduced with the aim to guarantee a timely and effective delivery of projects and ex-
ante  mechanisms  for  the  resolution  of  conflicts  are  also  envisaged.  The  governance  model, 
including  its  structures  and  related  roles  and  responsibilities,  has  been  enshrined  in  a  legal  act 

81 

 
 
 
 
adopted by the government at the end of May 2021 (Decree-Law of 31 May 2021, n. 77), which 
contributes to the empowerment of the bodies involved. 

Relevant  actions  to  strengthen  administrative  capacity,  including  at  local  level,  and 
simplify  administrative  procedures  are  envisaged  to  ensure  an  effective  implementation 
and monitoring of the plan. In order to strengthen administrative capacity, the plan envisages a 
number of actions, including training to boost human capital and ad hoc temporary recruitments 
to  support  targeted  interventions  and  provide  the  administrations  involved  with  the  necessary 
expertise,  which  have  been  also  enshrined  in  a  legal  act  (Decree-Law  of  9  June  2021,  n.  80). 
These  actions  will  be  implemented  through  measures  envisaged  under  the  recovery  and 
resilience plan, but also through national resources, including the temporary recruitment of 2 800 
units of personnel for public administrations of the South of Italy (which will reinforce human 
capital involved in the planning and spending of EU funds) and of staff for various structures and 
bodies.  A  number  of  additional  actions  are  envisaged  to  strengthen  administrative  capacity, 
notably  the  provision  of  technical  and  operational  support  to  administrations  in  the 
implementation  of  projects,  including  in  particular  through  strengthened  in-house  or  public 
bodies, and the provision of the possibility to resort to external expertise. Finally,  these actions 
are  accompanied  by  measures  aimed  at  cutting  red  tape  and  simplifying  administrative 
procedures,  including  in  the  areas  of  public  contracts,  environmental  regulation,  building  and 
urban planning and regeneration, which have also been enshrined in a legal act (Decree-Law of 
31 May 2021, n. 77).  

The  arrangements  proposed  by  Italy  in  its  recovery  and  resilience  plan  are  expected  to  be 
adequate to ensure effective monitoring and implementation of the recovery and resilience plan, 
including the envisaged timetable, milestones and targets, and the related indicators. This would 
warrant a rating of A under the assessment criterion 2.8 of Annex V to the RRF Regulation. 

4.9 Costing  

Italy has submitted information about cost estimates for all measures of the plan involving 
a  cost.  All  measures  across  the  six  missions  and  16  components  of  the  plan  include  a  cost 
estimate accompanied by information on how it was reached, consisting on references .   

Reasonable Costs 

The  estimated  costs  are  reasonable,  with  the  volume  and  quality  of  information  variyng 
across  measures. The level of detail as regards the methodology and the assumptions made to 
reach those cost estimates varies across the plan. For some measures, there is a detailed and clear 
description  of  the  methodologies  and  calculations  made  to  reach  the  costing  estimated  and 
comparative  cost  data  are  provided  referring  to  specific  sources  taken  as  a  reference.  They 
mostly  relate  to  past  projects  carried  out  in  the  recent  past,  often  financed  by  the  European 

82 

 
 
 
 
 
 
 
Structural  Investment  Funds  (ESIF).  In  other  cases,  those  references  take  the  form  of  studies, 
evaluations  or  even  experiences  developed  in  the  private  sector.  For  other  measures,  the 
description of the costing estimates is more concise: the methodology and references on the basis 
of  which  the  costing  estimates  are  based  on,  are  not  spelled  out  with  the  same  level  of  detail. 
This is, in particular, the case for investments in railway infrastructure, where overall estimates 
are nonetheless within a plausible range. 

Plausible Costs  
The estimated costs are plausible, with methodologies and assumptions used varying across 
measures. In some cases, the costing estimate is reached by aggregating the estimated cost of the 
various inputs required for the implementation of the measure at stake. In other cases, the costing 
estimate  is  reached  by  referring  to  a  unit  cost  of  the  output  expected  by  that  measure,  using  a 
methodology that is similar to the Simplified Cost Options used for some projects under ESIF. In 
a limited number of cases, the methodologies and assumptions are less robust. 

 All  measures  financed  by  the  recovery  and  resilience  plan  for  Italy  refer  to  costs 
undertaken after 1 February 2020 and entail non-recurrent costs, except for duly justified 
exceptions. Even though certain  steps for a few  measures were taken before 1 February 2020, 
only those that started after 1 February 2020, and for which the entirety of the costs are recorded 
after  that  date,  have  been  included  in  the  plan.  In  addition,  some  costs  such  as  staff  costs 
classified under current expenditure in the European System of Accounts 2010 will be financed 
considering their strict temporary nature, their close link with  the implementation of a specific 
investment  or  reform  of  the  plan  and  their  sustainability  (e.g.  justice).  All  costs  are  therefore 
fully in line with Article 5(1) of the RRF Regulation. 

No double Union financing  

The  cost  estimates  of  the  plan  provide  an  acceptable  level  of  assurance  about  the  risk  of 
double  funding.  In  terms  of  programming,  the  potential  overlap  between  RRP  and  ESIF  and 
CEF is significant. For this reason, for a significant number of measures, there is a reference that 
part of the project has been or is expected to be financed by other European budgetary sources, 
notably in the South of the country. The principle of additionality and complementary of funding 
of Article 9 of the RRF Regulation provides that the reforms and investment projects financed by 
the  Recovery  and  Resilience  Facility  may  receive  support  from  other  Union  programmes  and 
instruments provided that such support does not cover the same cost. The information provided 
by Italy´s recovery and resilience plan in some cases refers to specific type of cost expected to be 
financed by the various Union programmes, but details are not always clear enough or simply not 
provided.  In  addition,  under  the  monitoring  arrangements,  the  plan  specifies  that  every 
administration responsible for the implementation of the various measures will make controls in 

83 

 
 
 
 
 
 
relation to legality and regularity and will adopt the necessary measures to prevent, correct and 
sanction any misuse of funding, including the double funding of the same cost. 

Commensurate to the expected social and economic impact of the plan 

The  costing  estimates  of  the  plan  are  commensurate  to  its  expected  economic  and  social 
impact. The plan is expected to contribute to effectively addressing all or a significant subset of 
the  challenges  identified  in  the  relevant  country-specific  recommendations  and  contains 
measures  that  are  expected  to  foster  economic  growth  and  economic  cohesion  in  an  inclusive 
manner, to boost the  growth potential of the  Italian economy, to  stimulate job  creation, and to 
mitigate the adverse effects of the crisis. More than  EUR 122 billion out of EUR 191,5 billion 
are  expected  to  be  additional  public  investment,  which,  according  to  government  estimates,  is 
estimated to increase GDP by 3,6% and employment by 3,2% by 2026 compared to a scenario 
without the Recovery and Resilience Facility. 

The justification provided by Italy on the amount of the estimated total costs of the recovery and 
resilience  plan  is  to  a  medium  extent  reasonable,  plausible,  in  line  with  the  principle  of  cost-
efficiency and is commensurate to the expected national economic and social impact.  
Italy  provided  sufficient  information  and  evidence  that  the  amount  of  the  estimated  cost  of  the 
reforms and investments of the recovery and resilience plan to be financed under the Facility is 
not covered by existing or planned Union financing. 
This  would  warrant  a  rating  of  B  under  the  assessment  criterion  2.9  of  Annex  V  to  the  RRF 
Regulation. 

4.10  Controls and audit  

Robustness of internal control system and distribution of roles and responsibilities  

The  Plan  identifies  a  clear  structure  for  the  control  system.  The  Italian  recovery  and 
resilience  plan  envisages  an  organizational  structure  aimed  at  ensuring:  (i)  the  timely  and 
effective  implementation  of  the  measures  included  in  the  plan,  carried  out  by  central 
administrations  (Ministries),  as  well  as  by  the  regional  and  local  authorities;  (ii)  the  central 
coordination  for  monitoring  the  achievement  of  the  milestones  and  targets  and  monitoring  the 
implementation of the plan. At political level, a steering committee will be set up, with the task 
of  monitoring  the  progress  of  the  plan’s  implementation,  with  the  possibility  to  propose  the 
activation  of  substitute  powers  in  case  of  implementation  issues  and  the  regulatory  changes  as 
necessary.  At  operational  level,  a  central  structure  for  the  coordination  and  monitoring  of  the 
plan (“Central Service for the RRP”) will be established at the Ministry of Economy and Finance 
– Department of State General Accounting. This structure will be composed of operational units 

84 

 
 
 
 
 
 
 
 
 
for monitoring, financial management, control, reporting and technical and operational support. 
Moreover, coordination structures for the monitoring of plan’s implementation will be identified 
at the level of each central administration responsible for the relevant measures. 

The Plan establishes a dedicated Audit Body for the internal control system. The envisaged 
model  provides  for  the  establishment  of  an  Audit  Body  responsible  for  the  internal  control 
system, to protect the financial interests of the Union and more specifically to prevent, identify, 
report and correct cases of fraud, corruption or conflict of interest. This body is established at the 
Ministry  of  Economy  and  Finance,  Department  of  State  General  Accounting  –  IGRUE  and  its 
independence is ensured by segregation of functions. The ‘MyAudit’ IT application will be used 
for  the  reporting  on,  and  monitoring  of  follow-up  to,  controls  and  audits  and  for  the 
establishment of the summary of audits by the reporting unit within the Central Service for the 
RRP.  The  audit  strategy  of  the  Audit  Body  includes  information  on  risk  assessment,  audit 
approach  and  resources.  A  systems  audit  on  information  systems,  and  in  particular  on  the 
adequate collection and access to the data referred to in Article 22(2)(d) of the RRF Regulation, 
is planned to be carried out at the start of the plan’s implementation, before the submission of the 
first payment request. Other national bodies fulfilling their role in the implementation of the plan 
in relation to its control system are the National Court of Auditors, the Economic and Financial 
Police (Guardia di Finanza) and the National Anti-Corruption Authority (ANAC). 

The distribution of roles and responsibilities is enshrined in legal acts, which also envisage 
the  simplification  of  procedures  and  strengthening  of  administrative  capacity.  As  reform 
measures concerning the  public administration are part of the recovery and resilience plan, the 
administrative arrangements for the implementation of the plan will also be subject to ongoing 
and  future  simplification  and  organizational  strengthening  measures.  The  Italian  recovery  and 
resilience  plan  further  envisages  a  number  of  actions  aimed  at  strengthening  administrative 
capacity,  including  (i)  the  recruitment  of  human  resources;  (ii)  the  simplification  of 
administrative procedures; and (iii) the provision of technical and operational support, including 
in relation to tools related to e-procurement and the unitary IT system ReGiS. The set-up of the 
relevant bodies and related mandates had been enshrined in Decree-Law of 31 May, n.77, which 
contributes to the empowerment of the implementation structures. The envisaged system presents 
a robust process  and structure in  its set-up, where roles and responsibilities are defined clearly 
and enshrined in legal acts. The relevant control functions are appropriately segregated and the 
strengthening of administrative capacity envisaged in the plan will play an important role. The 
adequacy  of  the  arrangement  of  the  arrangement  also  takes  into  account  the  envisaged  system 
audit    on  the  IT  arrangements  by  the  Audit  Body,  including  as  regards  the  collection  of  data 
under Article 22(2)(d). 

Adequacy of control systems and other relevant arrangements  

85 

 
 
 
 
 
 
The Plan identifies specific bodies in charge of the control system. The technical annex to the 
recovery and resilience plan on implementation, monitoring, control and audit makes reference 
to all relevant institutions that will contribute to the prevention of fraud, corruption and conflict 
of  interest.  This  is  set  to  occur  by  means  of  own  controls,  obligation  for  all  public 
administrations  to  establish  a  three-year  Corruption  and  Transparency  Prevention  Plan,  and 
controls by the Ministry of Economy and Finance, Department of State General Accounting. The 
operational unit for control, within the Central Service for the RRP, and the Audit Body will use 
the Commission data-mining and risk-scoring tool Arachne in their risk analysis for control and 
audit. 

A  dedicated  IT  system  for  monitoring  is  envisaged  in  the  Plan.  ReGiS56,  the  unitary  IT 
monitoring system, is set to contribute to several functions, including registration, management, 
monitoring,  reporting,  controls,  audit,  irregularities  identification,  both  for  financial  and 
performance  data  (i.e.  milestones  and  targets),  and  to  be  used  by  all  levels  of  administration. 
Until the operationalization of ReGiS (envisaged by mid-2022), the existing IT systems used in 
the context of ESI funds will be used to report on the implementation of the plan.  The systems 
currently  in  use  will  be  appropriately  adapted  to  manage  the  peculiarities  of  the  Recovery  and 
Resilience Facility;  in  particular, importance will be attached to  the achievement of milestones 
and  targets  through  the  creation  of  reporting  dashboards  based  on  data  collected  in  centralized 
databases.  Transitional  arrangements  are  also  in  place  for  the  recoding  of  final  recipient  and 
(sub-)contractor data under art. 22(2)(d) of the RRF Regulation, based on a range of databases. 
The unitary system  will also  capture data on the  implementation  of operations financed by the 
national  Fund  complementary  to  the  recovery  and  resilience  plan,  as  well  as  data  from 
programmes financed by the ESI funds 2021-2027 and the National Development and Cohesion 
Fund. Municipalities, regions as well as other bodies feed data into the IT system, which are then 
validated by the responsible Ministries and aggregated at plan level by the Ministry of Economy 
and Finance. A shared protocol and the information backbone already in place for monitoring the 
ESI funds 2014-2020 will be used. 

56 The ReGiS unitary system, provided by Art.1 paragraph 1043 of the Law no. 178 of 30 December 2020 (Budget 
Law 2021)  is distinguished by a model that provides for the  collection and storage of data relating to all the 
project initiatives envisaged in the recovery and resilience plan, up to the level of the final recipient in a single 
centralised database which, through interoperability services, can operate in a synergistic and integrated manner 
with  the  other  tools  that  are  used  for  the  operational  management  of  projects  or  systems  for  verification  and 
control.  The  information  is  collected,  in  detail,  by  the  owners  of  the  interventions  (Municipalities,  Regions, 
Ministries,  other  Bodies)  and  made  available  to  the  individual  Measures  Administrations  that  validate  it  and 
send  it  to  the  Ministry  of  Economy  and  Finance  which  takes  care  of  aggregation  at  the  plan  level  and 
dissemination. 

86 

 
 
 
 
                                                 
 
Transitional IT arrangements are envisaged until the operationalization of the new unitary 
IT system. The provided time-line for the implementation of the IT systems indicate that in July 
2021  the  transitional  systems  would  be  operational  (measures  set-up,  financial  set-up, 
governance  module  and  temporary  solution  data  ingestion)  and  the  various  ReGiS  modules 
would  become  operational  between  March  and  July  2022,  with  data  migration  foreseen  as  of 
January  2022  and  parallel  runs  as  of  March  2022.  The  unitary  system  and  the  transitional 
arrangements collect the data as required by Art.22(2)(d) of the RRF Regulation  and allow for 
feeding    data  related  to  recovery  and  resilience  plan  into  the  Arachne  IT  system.  The  tool 
indicated for the analysis of the data relating to (sub-)contractors and final recipients is obtained 
by  the  national  Anti-Corruption  Authority  (ANAC)  through  public  administration  databases, 
including, for instance, Tender Identification Code (CIG)-based databases. The Audit Body will 
verify  that  the  data  referred  to  in  Article  22(2)(d)  of  the  RRF  Regulation  in  relation  to  the 
transitional IT arrangements are collected and accessible for the purposes of control and audit as 
established by the RRF  Regulation.  The proper functioning of internal  controls,  data-capturing 
arrangements  and  reporting  structures,  as  well  as  the  transition  to  ReGiS  is  critical  for  the 
reporting  on  the  achievement  of  targets  and  milestones  and  for  establishing  payment  requests. 
The  transitional  IT  arrangements,  progress  in  the  development  of  a  ReGiS  and  the  actual 
transition  to  this  system  merit  specific  IT  audit  work  by  the  Audit  Body  in  respect  of  the 
capability  of  ReGiS  to  fulfill  the  functionalities  described  in  the  plan  and  in  particular  the 
integrity of data  and maintenance of audit trail. For the transitional system,  the findings  of the 
Audit Body are expected to be included in the summary of audits with the first payment request. 
For  the  ReGiS  system,  reporting  are  expected  to  be  defined  upon  transition  to  that  system  by 
mid‑ 2022.  

The  Plan  envisages  strenghtned  arrangements  for  the  vis-à-vis  fraud  and  corruption.  The 
Plan  indicates  that  protocols  between  the  Ministry  of  Economy  and  Finance  and  the  National 
Anti-Corruption Authority (ANAC) and the Guardia di Finanza are being prepared, in order to 
exchange  data  and  information  and  carry  out  targeted  inspections  on  the  prevention, 
identification and repression of violations to the detriment of the EU budget with reference to all 
phenomena  of  EU  fraud  and  corruption.  Implementing  authorities  may  also  conclude  such 
specific arrangements with those authorities.  

The  envisaged  control  system  is  considered  to  be  adequate.  The  controls  system  and  other 
relevant  arrangements,  including  for  the  collection  and  making  available  of  data  on  final 
recipients,  described  in  the  recovery  and  resilience  plan,  in  particular  to  prevent,  detect  and 
correct  corruption,  fraud  and  conflicts  of  interest  when  using  the  funds  provided  under  the 
Facility  are  sufficiently  robust  considering  also  the  assurance  provided  by  the  performance  of 
systems audit in relation to the transitional IT arrangements.  

Adequacy of arrangements to avoid double EU funding  

87 

 
 
 
 
 
The arrangements to avoid double EU funding rely  on different tools and are considered 
adequate.  The  risk  analysis  to  determine  projects  subject  to  control  and  audit  aims  to  target 
projects,  contracts,  contractors  and  beneficiaries  more  prone  to  risk  of  fraud  including  double 
funding  of  the  same  expenditure.  The  assignment,  in  compliance  with  current  national 
regulations,  of  the  unique  project  code  (CUP)  for  each  investment  project  registered  in  the 
system (in the  first  phase through the transitional  arrangements  and in  a  second phase through 
ReGiS) aims at preventing double financing and reducing the risk of fraud. The ReGiS unitary 
system  will  also  be  used  for  the  management  of  ESI  funds  2021-2027  and  national  sources  of 
financing.  This  makes  it  possible  to  verify  and  monitor,  within  a  single  database,  the  projects 
financed under the recovery and resilience plan but also under other EU programs and national 
resources. The general and specific arrangements described in the recovery and resilience plan to 
avoid double funding from the Facility and other Union programmes are rated adequate. 

Legal empowerment and administrative capacity of control function  

The control function is legally empowered and the strengthening of administrative capacity 
is  envisaged.  Existing  bodies  involved  in  control  functions  are  part  of  the  national  set-up; 
therefore, they are already empowered to perform their tasks. The new structures envisaged for 
the purpose of the monitoring and implementation of the recovery and resilience plan, including 
the Audit Body, have been established by means of a legal act (Decree-Law of 31 May 2021), 
which also defined their roles and responsibilities, thus contributing to their empowerment. The 
plan  further  envisages  a  number  of  actions  to  strengthen  administrative  capacity,  including  the 
recruitment  of  additional  staff,  the  provision  of  operational  support  and  the  simplification  of 
administrative  procedures.  A  number  of  implementing  acts  will  contribute  to  finalising  the 
definition of the RRF (internal) control framework. 

The arrangements proposed by Italy in the recovery and resilience plan, to prevent, detect and 
correct  corruption,  fraud  and  conflicts  of  interest  when  using  the  funds  provided  under  the 
Facility, including the arrangements aimed to avoid double funding from the Facility and other 
Union  programmes,  are  assessed  to  be  adequate,  taking  into  account  the  additional 
arrangements envisaged by the time of the submission of the first payment request. This would 
warrant a rating of A under the assessment criterion 2.10 of Annex V to the RRF Regulation. 

4.11  Coherence   

Mutually-reinforcing measures 

The components in the plan are overall coherent in their aim.   The plan is also expected to 
contribute to address Italy’s long-standing challenges, among which the sustainability of public 
finances and low productivity growth. The Plan contains some fiscal structural reforms that have 

88 

 
 
 
 
 
 
 
 
the potential to contribute to the sustainability of public finances.The low productivity growth is 
addressed across components and missions of the Plan, thanks to both investment and structural 
reforms.  The  reforms  of  the  public  administration,  the  justice  system  and  the  business 
environment consistently aim at increasing the potential growth of Italy. Ultimately, the increase 
of potential growth is also expected to support the sustainability of public finances. 

In addition, reforms and investments included in each component are mutually reinforcing 
with  a  good  balance  of  reforms  and  investments,  and  significant  synergies  between  the 
different components. Overall, the Plan includes 190 measures, made of 132 investments  and 
58  reforms,  most  of  which  of  very  extensive  and  widespread  reach  that  will  have  positive 
spillovers  horizontally  on  all  economic  and  social  activities.  All  these  measures  are  part  of  a 
common  strategy  and  consistently  work  together  to  tackle  structural  challenges  and  allow  the 
deployment  of  the  twin  transition,  create  a  growth-friendly  economic  environment  and  reduce 
social and territorial disparities. 

in 

firms/companies  and 

the  public  administration 

Looking at the Plan as a whole, it can be derived that the measures envisaged in the plan 
reinforce and complement each other and contribute to the same objectives. The investment 
and  reforms  included  in  the  Plan  aim  at  reducing  the  Italian  digital  and  innovation  gap  both 
among 
to  enhance  productivity, 
competitiveness  and  resilience  to  changes.  While  the  effort  of  digitalization  and  innovation  is 
central  in  Mission  1  (“Digitalization,  Innovation,  Competitiveness,  Culture  and  Tourism”),  it 
spreads  across  all  areas  of  public  policies,  since  it  concerns  the  continuous  and  necessary 
technological  upgrading  of  production  processes;  it  helps  the  transition  towards  more  modern 
infrastructures,  from  energy  to  transport,  where  monitoring  systems  with  sensors  and  data 
platforms  are  an  innovative  asset  quality  and  safety  management  tool  and  where  sustainable 
mobility  necessarily  relies  on  innovation  and  more  environmental  friendly  technologies 
(Missions  2  “Green  Revolution  and  Ecological  Transition”,  and  Mission  3  “Infrastructures  for 
sustainable mobility”); it enhances schooling and education, introduces modern and innovation-
oriented programs, induces the upgrade of teachers’ and students’ skills, fosters R&D activities, 
and  the  quality  of  buildings  and  infrastructures  (Mission  4  “Education  and  Research”);  it 
facilitates the process  of upskilling, reskilling and life-long learning (Mission  5 “Inclusion and 
Cohesion”);  it  modernizes  hospital  infrastructures,  medical  equipment,  research  and  scientific 
activities, staff’s skills, in order to ensure the best possible level of healthcare and be as close as 
possible  to  all  citizens  (Mission  6  “Health”).  At  the  same  time  the  digitalization  of  the  public 
administration and of the justice system are a necessary prerequisite to build a faster and more 
effective public services for businesses and citizens. 

The measures related to the ecological transition also aim at enhancing competitiveness and 
creating  new  productive  activities  and  stable  jobs,  while  minimizing  the  environmental 
footprint of the country. Missions 2 and 3 are strictly interlinked in the effort to reduce Italian 

89 

 
 
 
 
 
energy and technological dependency, GHG emissions, in order to pave the way for the country 
to meet the European environmental and climate targets. In doing so, they also intend to reduce 
the  infrastructure  gap  between  the  North  and  South.  The  reduction  of  (technological  and 
infrastructural) gaps between territories is a common path between Missions 1, 2 and 3, whereby 
a significant amount of resources will be devoted to the South in order to fill the digital, physical 
and  social  divide  and  bring  better  services  and  more  job  opportunities.  At  the  same  time,  the 
creation  of  new  jobs  cannot  work  if  not  sustained  also  by  investments  and  reforms  on  the 
education systems and the strengthening of R&D and innovative process pursued by Mission 4 
and more up-to-date labour policies as per Mission 5. 

The  move  towards  a  more  digitalized,  connected,  sustainable  and  modern  country  will 
create employment possibilities for younger generations and women. This is true particularly 
in the currently more remote areas of Italy. The creation of new nursery and primary schools and 
the  improvement  of  childcare  services  (Mission  4)  will  also  have  positive  effects  on  women’s 
access to the job market. In terms of specific economic sectors, the expansion and modernization 
of  tourism  and  cultural  services  (Mission  1),  which  have  a  high  proportion  of  women,  is  also 
expected to help increasing the female employment rate. More generally, the effort not to leave 
anybody  behind  is  clearly  at  the  hearth  of  Mission  5’s  inclusion  and  cohesion  enhancing 
measures and, intuitively, of the improvement of the healthcare system in all regions (Mission 6). 
The  Plans  also  includes  links  between  investments  for  Industry  4.0  (Mission  1)  and  support 
services for digitalisation of businesses (Mission 4). It will be also important to link incentives 
envisaged under Transition 4.0 (Mission 1) with investments in human capital,  apprenticeships 
opportunities and in reskilling and upskilling of workers (under Mission 5). 

A wide set of structural reforms is expected to have an impact on the economic and social 
objectives of the Plan. The reform of the public procurement rules and the revision of the Code 
of  Public  Contracts  are  expected  to  impact  on  the  large  majority  of  investments,  which  will 
benefit  from  simplified  procedures  for  the  award  of  projects,  services  and  infrastructure 
construction  works  and  for  the  potential  litigation  arising  from  the  award  and  execution  phase 
thereof.  The  simplification  of  procedures  will  also  have  the  indirect  effect  of  reducing  the 
litigation around the award of public contracts and increase the legal certainty for companies and 
businesses.  The  rules  on  late  payment  are  designed  to  make  the  Public  Administration’s 
purchasing  more  attractive  and  competitive,  with  a  consequent  increase  in  the  quality  of  the 
service/products offered. The Recovery Procurement Platform aims at modernizing and speeding 
up the national public procurement system to support the Plan’s development policies. Also the 
reforms  on  environmental  authorizations  and  those  on  urban  planning  and  measures  for  urban 
regeneration are expected to significantly simplify the deployment of investments in Missions 1, 
2, 3 and 4. 

90 

 
 
 
 
 
A  significant  boost  to  the  competitiveness  of  the  country  will  be  brought  also  by  the 
reforms  stemming  from  the  annual  competition  law.  Such  preriodic  legislative  intervention 
has been much awaited in the past few years but only once implemented. The Competition Law 
will have to be adopted each year, fostering competition and reducing barriers to entry in local 
public services,  and avoiding the undue prolongation of concessions to  incumbent  operators in 
many  sectors.  With  regard  to  sector  specific  measures,  the  annual  Competition  Laws  feature 
interventions in the energy (electricity, gas and water), waste management, transport (ports, rail 
and highways) which  intend to complement the investments and reforms under Mission 2 and 3. 
Also  the  Laws  will  be  designed  to  make  starting  a  business  easier  and  plan  to  introduce  new 
rules on market surveillance. 

Complementarity of measures 
Also looking at the coherence of each Mission, it appears that the Plan contains measures 
that mutually reinforce and complement each other. Reforms and investments under Mission 
1  aim  at  reducing  the  structural  gaps  in  competitiveness,  productivity  and  digitalization. 
Investments  in  Component  M1C1  focus  on  making  the  public  administration  more  efficient, 
accessible and predictable. The digitalization and simplification of the public administration  will 
help businesses and citizens obtaining quicker and more reliable reactions from all levels of the 
public administration. The reform on “good administration” and simplification of procedures is a 
necessary  complement  to  the  efforts  on  digitalization  and  accessibility  of  the  public 
administation,  as  it  will  help  drastically  cutting  the  red  tape  for  businesses  and  citizens, 
streamlining formalities and avoid unnecessary administrative burdens.  

In the context of improving the effectiveness of the Public Administration , a central role is 
played  by  the  civil  and  criminal  justice  reforms.  These  reforms,  aimed  at  speeding  up  the 
length  of  judicial  proceeding  and  reducing  the  backlog  at  all  levels  of  the  justice  system    can 
provide  prompter,  fairer,  more  legally  clear  response  to  all  parties  being  involved  in  legal 
disputes.  

In  order  to  further  enhance  the  overall  economic  context  Component  M1C2  aims  at 
promoting  innovation  and  digitalization  of  the  whole  production  system.  It  envisages 
interventions across economic sectors such as stimulating investment in technology (Transition 
4.0), research and development, accompanied by the reform of the industrial property system. As 
noted  above,  the  component  includes  important  investments  to  ensure  coverage  of  the  whole 
territory  with  ultra-broadband  networks  (FTTH  fibre,  FWA  and  5G),  which  are  necessary 
prerequisite  for  the  modernization  of  the  country.  Moreover,  M1C1  includes  investments  to 
reinforce cybersecurity. 

91 

 
 
 
 
 
 
 
For  the  green  and  ecological  transition  of  Mission  2,  the    investments  and    reforms 
contained therein are centered around the common objective of achieving the targets set by 
the current Integrated National Energy and Climate Plan and the additional European and 
national  environmental  targets.  The  ecological  transition  is  conceived  together  with  a 
‘bureaucratic transition’, which will include fundamental reforms in authorization processes and 
governance  for  many  of  the  measures.  For  instance,  the  reforms  on  the  national  strategy  for 
circular  economy  clearly  strengthen  the  effectiveness  of  Component  M2C1  to  reach  full 
environmental  sustainability  and  to  develop  a  smart  and  sustainable  agricultural/food  supply 
chain,  reducing  its  environmental  impact  through  green  supply  chains.  In  order  to  expand  the 
objective  of  decarbonization  to  all  sectors,  Component  M2C2  includes  actions  to  significantly 
increase  the  penetration  of  renewables,  through  innovative  and  offshore  solutions  and  the 
reinforcement/modernization of the networks. Investments on sustainable mobility, with a strong 
focus on electromobility, soft mobility and the adoption of hydrogen based solutions in line with 
the  EU  Hydrogen  Strategy  all  go  in  the  same  direction.  These  measures  are  backed  up  by  the 
necessary  reforms  such  as  the  simplification  of  authorization  procedures  for  onshore  and 
offshore renewable installations and the reduction of regulatory barriers to the use of hydrogen. 
GHG  reduction  also  goes  through  the  increase  in  (private  and  public)  buildings’  energy 
efficiency, as envisaged  in  Component M2C3, which is  also  based on the simplification of the 
energy requalification procedures. Finally, the set of measures conceived in Component M2C4 to 
protect and restore the “territory”, as to mitigate the hydrogeological, preservation of green areas 
and  biodiversity,  the  elimination  of  water  and  soil  pollution,  complement  the  above  efforts  to 
make the country more resilient to inevitable climate change. 

In this context and to complement the interventions on GHG reductions, Mission 3 brings 
forward  more  specific  interventions  on  mobility.  The  measures  contained  in  the  first 
component  are  intended  for  the  development  of  the  Italian  rail  system,  while  the  second 
component  —  Intermodality  and  integrated  logistics  —  provides  for  measures  to  support  the 
modernisation and digitalisation of the logistics system. In close connection with the structure of 
this Mission, reforms on road safety 4.0 will improve the safety and climate/seismic resilience of 
bridges and viaducts, using the solutions provided by technological innovation and with a view 
to adapting to climate change. 

Planned  reforms  and  investments  in  the  education  and  research  systems  as  presented  in 
Mission 4 jointly contribute to enhance the quality of human capital in the long run. The 
reforms  and  investments  for  the  teaching  professions  are  designed  to  increase  the  quality  of 
primary and secondary education by increasing the requirements to access the profession and by 
providing  training  to  the  existing  teachers  to  accompany  the  twin  transition  for  the  next 
generations.  Reforms  and  investments  included  in  the  two  components  of  Mission  4  are  quite 
complementary to address the current skill mismatch between education and labour demand, the 
low percentage of adults with tertiary qualifications and creating synergies between universities 

92 

 
 
 
 
and companies, supporting innovation and technology transfer processes, strengthening skills to 
spread innovation. On tertiary education, particularly  on degree  groups and Ph.D programmes, 
the reform of the research system allowing mobility amongst private and public research centers 
is coupled with significant investments for fostering research and innovation. These actions will 
impact the quality of human capital in the time horizon of the RRF and beyond while mutually 
reinforcing the circle between university and business through innovation.  

The  complementarity  of  reforms  and  investements  related  to  inclusion  and  cohesion 
(Mission 5) consists of covering a wide array of social topics. This mission covers from active 
labour  market  policies  in  component  M5C1,  to  social  inclusion  with  actions  targeted  towards 
vulnerable and disadvantaged groups in component M5C2, to conclude with territorial cohesion 
including interventions for the resilience of internal, peripheral and mountain areas, through the 
strengthening of Inner Areas and projects for the development of the South. 
Mission  6  (health)  is  built  around  two  components  that  aim  at  strengthening  proximity 
services and digitalizing the national  healthcare  system ensuring standard services across 
Regions.  A  significant  amount  of  resources  is  allocated  in  component  M6C1  to  create  new 
infrastructures  (such  as  Community  Health  House  and  Community  Hospitals)  to  deliver 
proximity  services  and  digital  endowments  to  provide  Home  care.  Component  M6C2 
complements these actions with a focus on technological and digital update of hospitals and on 
the  development  of  human  capital,  through  the  modernisation  of  the  knowledge  tools  and 
platforms of content, as  well as the development of professional  skills.  The package of  reform 
and investments will help overcome the fragmentation of healthcare delivery by improving the 
access  and  continuity  of  care  and  by  addressing  the  need  for  an  improved  care  governance 
pathway  in  a  multidisciplinary  approach.  The  Plan  addresses  the  multi-layer  provision  of 
healthcare  services  (primary,  secondary,  tertiary  care),  ensures  a  more  homogenous  quality  of 
care across the territory and support a more adequate deployment of medical treatments. 

In  order  to  promote  wider  coherence  across  instruments,  notably  with  the  European  cohesion 
policy funds, a balanced territorial allocation of resources is encouraged. 

Taking  into  consideration  the  qualitative  assessment  of  all  components  of  Italy’s  recovery  and 
resilience  plan,  their  individual  weight  (importance,  relevance,  financial  allocation)  and  their 
interactions,  the  plan  contains  measures  for  the  implementation  of  reforms  and  public 
investments which, to a high extent, represent coherent actions. This would warrant a rating of A 
under the assessment criterion 2.11 of Annex V to the RRF Regulation. 

93 

 
 
 
 
 
 
 
ANNEX – TAGGING TABLE  

Measure/ 
Sub-Measure 
ID 

Measure/Sub-Measure Name 

Budget (EUR m) 

Climate 

Digital 

Int. 
Field 

Coeff
. % 

Int. 
Field 

Coeff. 
% 

M1C1-I1.4-5 

M1C1-I1.1-1 
M1C1-I1.2-2 
M1C1-I1.3-3 
M1C1-I1.3-4 

Digital infrastructure 
Cloud enablement for local PA 
National Digital Data Platform 
Single Digital Gateway 
Citizen experience - Improvement 
of the quality and the usability of 
digital public services 
Citizen inclusion - Accessibility 
improvement of digital public 
services 
Adoption scale up of PagoPA 
platform services and the “IO” 
app 
Adoption scale up of the National 
Digital Identity platforms (SPID, 
CIE) and the national registry 
(ANPR) 
M1C1-I1.4-8 
M1C1-I1.4-9 
Digitization of public notices 
M1C1-I1.4-10  Mobility as a Service for Italy 

M1C1-I1.4-6 

M1C1-I1.4-7 

M1C1-I1.5-11  Cybersecurity 

M1C1-I1.6-12 

M1C1-I1.6-13 

M1C1-I1.6-14 

Digitization of the Ministry of the 
Interior 
Digitization of the Ministry of 
Justice 
Digitization of National Social 
Security Institute (INPS) and 
National Institute for Insurance 
against Accidents at work (INAIL) 
Digitization of the Ministry of 
Defense 

M1C1-I1.6-15 
M1C1-I1.6-16  Digitization of the Council of State 
M1C1-I1.6-17  Digitization of the Finance Police 
M1C1-I1.7-18  Digital Civic Service 

Network of digital facilitation 
M1C1-I1.7-19 
services 
M1C1-R1.2-21  Transformation support 

Organisational Innovation of 
Justice - Sub-measure - Hiring of 
human capital to strengthen the 

M1C1-I3.1-34 

94 

900 
1 000 
556 
90 

613 

80 

750 

285 
245 
40 

623 

107 

133 

296 

43 
8 
25 
60 

135 
155 

907 

055 
011 
011 
011 

100% 
100% 
100% 
100% 

011 

100% 

011 

100% 

011 

100% 

011ter 
011 
011 
021qui
nquies 

011 
011qua
ter 

100% 
100% 
100% 

100% 

100% 

100% 

011 

100% 

011 
011 
011 
108 

108 
011 

100% 
100% 
100% 
100% 

100% 
100% 

011qua
ter 

100% 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Judicial Office and overcome the 
disparities between the different 
judicial offices 
Tax credit for tangible 4.0 capital 
goods (Annex A) 
Tax credit for intangible 4.0 
capital goods (Annex B) 
Tax credit for training acrivities 
Innovation and technology of 
microelectronics 
Plan Italia 1 Gbps 
Italia 5G 
Connected Schools 
Connected Helth care facilities 
Connected smaller islands 
SatCom Initiative 
Earth Observation 
Space Factory 
In-Orbit Economy  
Refinancing and remodelling of 
Fund 394/81 managed by SIMEST 
Competitiveness and resilience of 
supply chains 
Digital Strategy and Platforms of 
Culture Heritage 
Improve energy efficiency in 
cinema, theatres and museums 
Attractiveness of Small Historic 
Towns_energy efficiency of public 
buildings 
Attractiveness of Small Historic 
Towns_energy efficiency of SMEs 
Programs to enhance the identity 
of places: parks and historic 
gardens 
Development of the film industry 
(Cinecittà project)_digital 
component 
Development of the film industry 
(Cinecittà project)_construction of 
energy efficient studios 
Development of the film industry 
(Cinecittà project)_energy 
efficiency renovations 
Capacity building for culture 
operators to manage the digital 
and green transition. 

M1C2-I1-36 

M1C2-I1-37 
M1C2-I1-40 

M1C2-I2-41 
M1C2-I3-42 
M1C2-I3-43 
M1C2-I3-44 
M1C2-I3-45 
M1C2-I3-46 
M1C2-I4-47 
M1C2-I4-48 
M1C2-I4-49 
M1C2-I4-50 

M1C2-I5-51 

M1C2-I5-52 

M1C3-I1.1-54 

M1C3-I1.3-56 

M1C3-I2.1-
57a 
M1C3-I2.1-
57b 

M1C3-I2.3-59 

M1C3-I3.2-
62a 

M1C3-I3.2-
62b 

M1C3-I3.2-
62c 

M1C3-I3,3-63 

95 

8 868 

1 914 
300 

340 
3 864 
2 020 
261 
502 
61 
385 
417 
235 
450 

1 200 

750 

500 

010 

100% 

010 
108 
021qua
ter 
051 
051 
051 
051 
051 
055bis 
055bis 
009bis 
009bis 

100% 
100% 

100% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 
100% 

015 

40% 

015 

40% 

011 

100% 

210 

026 

40% 

560 

026 

40% 

100 

024 

40% 

300 

050 

40% 

61 

011 

100% 

165 

025ter 

40% 

65 

026 

40% 

155 

021bis 

100% 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
M1C3-I4.1-64  Digital Tourism Hub 

114 

011bis 

100% 

 Funds for the competitiveness of 
tourism enterprises - 
Improvement of the infrastructure 
of receptivity through the 
instrument of Credit -EIB Tourism 
Thematic Fund (under the EIB FoF) 
for development and resilience of 
tourism enterprises - MiSE 
guarantee fund to support the 
birth and consolidation of SMEs in 
the tourism sector - Digitization, 
innovation, competitiveness and 
culture through a specific 
participation of the Ministry of 
Tourism in the National Tourism 
Fund 
Implementation of new waste 
management plants and 
modernization of existing plants 
Circular economy “flagship” 
projects 
Logistics plan for the agri-food, 
fishing and aquaculture, forestry, 
floriculture and plant nursery 
sectors_innovative technologies in 
agro-industrial production 
Logistics plan for the agri-food, 
fishing and aquaculture, forestry, 
floriculture and plant nursery 
sectors_digital solutions for 
logistics 
Logistics plan for the agri-food, 
fishing and aquaculture, forestry, 
floriculture and plant nursery 
sectors_zero emission transport 
solutions 
Logistics plan for the agri-food, 
fishing and aquaculture, forestry, 
floriculture and plant nursery 
sectors_reduction of waste 
Logistics plan for the agri-food, 
fishing and aquaculture, forestry, 
floriculture and plant nursery 
sectors_renewable energy 
production 
Agri-solar Park_energy efficient 
renovations 

96 

M1C3-I4.2-65 

M2C1-I1.1-71 

M2C1-I1.2-72 

M2C1-I2.1-
73a 

M2C1-I2.1-
73b 

M2C1-I2.1-
73c 

M2C1-I2.1-
73d 

M2C1-I2.1-
73e 
M2C1-I2.2-
74a 

893 

025 

40% 

1 500 

042 

40% 

600 

042 

40% 

324 

047 

40% 

216 

010 

100% 

180 

079 

40% 

40 

047 

40% 

40 

029  100% 

750 

029  100% 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Agri-solar Park_energy efficient 
renovations_energy efficient 
cooling systems 

Agri-solar Park_solar panels 
Innovation and mechanization in 
the agricultural and food 
sectors_precision farming 
Innovation and mechanization in 
the agricultural and food 
sectors_oil sector 

525 

024 

40% 

225 

024 

40% 

200 

084 

100% 

100 

047 

40% 

Green islands_energy efficiency 

34 

026 

40% 

Green islands_zero emission 

6 

072bis  100% 

M2C1-I2.2-
74b 
M2C1-I2.2-
74c 

M2C1-I2.3-
76b 

M2C1-I2.3-77 
M2C1-I3.1-
78a 
M2C1-I3.1-
78b 
M2C1-I3.1-
78c 
M2C1-I3.1-
78d 

Green islands_waste management 

M2C2-I1.3-89 

M2C2-I1.2-88 

M2C2-I1.1-86 

M2C1-I3.3-80 

Green islands_solar energy 
Circular Economy and Sustainable 
Agriculture - Investment 3.3: 
Culture and awareness on 
environmental topics and 
challenges 
Development of agri-voltaic 
systems 
Promotion of RES for energy 
communities and jointly acting 
renewables self-consumers 
Promotion of innovative systems 
(including off-shore) 
Development of biomethane, 
according to criteria for 
promoting the circular economy 
Strengthening smart grids 
Interventions to increase the 
resilience of power grid 
Production of Hydrogen in 
brownfield sites (Hydrogen 
Valleys)_production 
Production of Hydrogen in 
brownfield sites (Hydrogen 
Valleys)_R&D 
Hydrogen Use in hard-to-abate 
industry 
Hydrogen testing for road 
M2C2-I3.3-98 
transport 
M2C2-I3.4-99  Hydrogen testing for railway 

M2C2-I1.4-90 
M2C2-I2.1-92 

M2C2-I3.2-97 

M2C2-I2.2-93 

M2C2-I3.1-94 

M2C2-I3.1-95 

97 

10 

50 

042 

40% 

029  100% 

30 

027  100% 

021bis 

100% 

1 099 

029  100% 

2 200 

029  100% 

675 

028  100% 

1 908 
3 610 

030bis  100% 
033  100% 

033 

40% 

500 

037  100% 

350 

032  100% 

150 

022  100% 

400 

027  100% 

230 
300 

077  100% 
077  100% 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
M2C2-I3.5-
101 
M2C2-I4.1-
102 

M2C2-I4.2-
103 
M2C2-I4.3-
104 

M2C2-I4.4-
105 

M2C2-I4.4-
105b 

M2C2-I4.4-
106 
M2C2-I4.4-
107 
M2C2-I4.4-
109 
M2C2-I5.1-
110 
M2C2-I5.1-
111 
M2C2-I5.1-
112 
M2C2-I5.2-
113 
M2C2-I5.3-
115 

M2C2-I5.4-
116 
M2C3-I1.1-
117 

mobility 
Hydrogen Research and 
Development  
Investment in soft mobility 
(National Plan of Cycle Path) 
Development of Rapid Mass 
Transport systems (metro, 
streetcar, BRT) 

Charging infrastructures  
Renewal of the regional public 
transport bus fleet with clean 
fuels vehicles 
Renewal of the regional public 
transport bus fleet with clean 
fuels vehicles 
Renewal of the regional public 
transport railway fleet with clean 
fuels trains and universal service 
Renewal fleet for the National fire 
brigade command_vehicles 
Renewal fleet for the National fire 
brigade command_recharging 

PV technology 

Wind industry 

Battery industry 

Hydrogen 

Electric buses 
Support to start-ups and venture 
capital active in the ecological 
transition 
Construction of new schools 
through building replacement - 

160 

022  100% 

600 

075  100% 

3 600 

073  100% 

741 

077  100% 

1 650 

074  100% 

765 

073  100% 

800 

072bis  100% 

123 

n/a57  100% 

18 

077  100% 

400 

029  100% 

100 

028  100% 

500 

022  100% 

450 

022  100% 

300 

027  100% 

250 

022  100% 

800 

025ter 

40% 

57 The ‘Methodology for climate tracking’ annexed to the Recovery and Resilience Facility Regulation does not set 
out intervention fields that would allow for climate or environmental tracking of electric vehicles or plug-in hybrid 
vehicles, except for vehicles for urban transport falling under intervention field 074. According to Article 18(4)(e) of 
the Regulation, the methodology should however ‘be used accordingly for measures that cannot be directly assigned 
to an intervention field listed in Annex VI’. In this context, the Commission has applied a 100% climate contribution 
coefficient for zero-emission vehicles of all categories (this includes battery electric and fuel cell/hydrogen-powered 
vehicles); a 40% climate contribution coefficient for plug-in hybrid light-duty vehicles; and, in line with the criteria 
under the Taxonomy Regulation, a 100% climate coefficient for low-emission heavy-duty vehicles. 

98 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
School building replacement and 
energy upgrading plan 
Efficiency of judicial sites: 
Construction of buildings, 
requalification and strengthening 
of real estate assets of the 
administration of justice in an 
ecological vein 
Strengthening of the Ecobonus 
and Sismabonus until 110% for 
energy efficiency and building 
safety 
Promotion of efficient district 
heating  
Implementation of an advanced 
and integrated monitoring and 
forecasting system 
Measures for flood and 
hydrogeological risk reduction 
Measures for flood and 
hydrogeological risk reduction  
Interventions for the resilience, 
the enhancement of the territory 
and the energy efficiency of the 
Municipalities_climate change 
Interventions for the resilience, 
the enhancement of the territory 
and the energy efficiency of the 
Municipalities_energy efficiency 
Protection and enhancement of 
urban and peri-urban forests 
Digitization of national parks. 
Nature conservation - monitoring 
of pressures and threats on 
species and habitats and climate 
change 
Digitization of national parks. 
Digital services to visitors to 
national parks and marine 
protected areas 
Digitization of national parks. 
Administrative simplification - 
Digitisation and simplification of 
procedures for services provided 
by Parks and Marine Protected 
Areas 

114 

026 

40% 

12 053 

025bis  100% 

200 

034bis  100% 

500 

035  100% 

1 287 

035  100% 

1 200 

035  100% 

3 000 

035  100% 

3 000 

026 

40% 

330 

050 

40% 

82 

050 

40% 

14 

4 

054ter 

100% 

011 

100% 

Re-naturification of Po area 

357 

050 

40% 

99 

M2C3-I1.2-
118 

M2C3-I2.1-
121 
M2C3-I3.1-
123 

M2C4-I1.1-
124 
M2C4-I2.1-
125 
M2C4-I2.1-
126 

M2C4-I2.2-
127 

M2C4-I2.2-
128 
M2C4-I3.1-
129 

M2C4-I3.2-
130 

M2C4-I3.2-
131 

M2C4-I3.2-
132 
M2C4-I3.3-
133 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
M2C4-I3.5-
135 

M2C4-I4.1-
136 

M2C4-I4.2-
137 

M2C4-I4.3-
138 
M2C4-I4.4-
139 

M3C1-I1.1-
140 

M3C1-I1.1-
141 

M3C1-I1.1-
142 

M3C1-I1.2-
143 

M3C1-I1.2-
144 

M3C1-I1.2-
145 
M3C1-I1.3-
146 
M3C1-I1.3-
147 
M3C1-I1.3-
148 

M3C1-I1.4-
149 
M3C1-I1.5-
150 

M3C1-I1.6-
151 
M3C1-I1.7-

Restoration and protection of the 
seabed and marine habitats 
Investments in primary water 
infrastructures for the security of 
water supply 
Reduction of losses in water 
distribution networks, including 
digitization and monitoring of 
networks 
Investments in the resilience of 
the irrigation agrosystem for 
better management of water 
resources 
Investments in sewerage and 
purification 
High-speed railway connections to 
the South for passengers and 
freight (Napoli - Bari) 
High-speed railway connections to 
the South for passengers and 
freight (Palermo-Catania) 
High-speed railway connections to 
the South for passengers and 
freight (Salerno-Reggio Calabria)  
High-speed lines in the North 
connecting to Europe (Brescia-
Verona-Padova) 
High-speed lines in the North 
connecting to Europe (Liguria-
Alpi) 
High-speed lines in the North 
connecting to Europe (Verona-
Brennero - opere di adduzione) 
Diagonal connections (Roma-
Pescara) 
Diagonal connections (Orte-
Falconara) 
Diagonal connections (Taranto-
Metaponto-Potenza-Battipaglia) 
Introducing the European Rail 
Transport Management System 
(ERTMS) 
Strengthening metropolitan nodes 
and key national links  
Strengthening regional lines - 
Upgrading of regional railways 
(management RFI) 
Upgrading, electrification and 

100 

400 

049 

40% 

2 000 

040 

40% 

900 

039bis 

40% 

880 

040 

40% 

600 

041bis 

40% 

1 400 

064  100% 

1 440 

064  100% 

1 800 

064  100% 

3 670 

064  100% 

3 970 

064  100% 

930 

065  100% 

620 

068  100% 

510 

068  100% 

450 

065  100% 

2 970 

071 

40% 

071 

100% 

2 970 

068  100% 

936 
2 400 

069 
069 

40% 
40% 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
152 
M3C1-I1.8-
153 

M3C2-I1.1-
154a 

M3C2-I1.1-
154b 

M3C2-I1.1-
154c 

M3C2-I1.1-
154d 

M3C2-I1.1-
154e 
M3C2-I2.1-
155 

M3C2-I2.1-
156 
M3C2-I2.1-
157 
M3C2-I2.2-
159a 
M3C2-I2.2-
158b 

M4C1-R1.7-
166 

M4C1-R2.1-
174 

M4C1-I3.2-
178 
M4C1-I3.4-
180 
M4C1-I4.1-
182 

resilience of railways South 
Upgrading railway stations (RFI 
management; in South) 
Green ports: renewable energy 
and energy efficiency 
interventions at ports_energy 
efficiency 
Green ports: renewable energy 
and energy efficiency 
interventions at ports_solar 
energy 
Green ports: renewable energy 
and energy efficiency 
interventions at ports_pollution 
reduction 
Green ports: renewable energy 
and energy efficiency 
interventions at ports_clean 
transport 
Green ports: renewable energy 
and energy efficiency 
interventions at ports_recharging 
stations 
The digitalization of the logistic 
chain_LogIN Center 
The digitalization of the logistic 
chain_Network of ports and 
freight terminals 
The digitalization of the logistic 
chain_LogIN Business 
The digitalization of air traffic 
management_optimization 
The digitalization of air traffic 
management_digitisation 
Reform of student housing 
regulation and investment in 
student housing 

Integrated digital teaching and 
training on the digital 
transformation for school staff 
School 4.0: innovative schools, 
wiring, new classrooms and 
workshops  
Teaching and advanced university 
skills 
Extension in number and career 
opportunities of PhDs (Research-

101 

700 

069 

40% 

68 

026 

40% 

124 

029  100% 

27 

048 

40% 

30 

074  100% 

077  100% 

025 
026 

40% 
40% 

22 

30 

45 

175 

80 

30 

960 
780 

800 

2 100 

500 

432 

084 

100% 

084 

100% 

084 

100% 

084 

100% 

084 

100% 

108 

100% 

012 

100% 

108 

100% 

016 

40% 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
oriented, Public Administration 
and Cultural Heritage) 
Partnerships extended to 
universities, research centers, 
companies and funding of basic 
research projects 
Partnerships extended to 
universities, research centers, 
companies and funding of basic 
research projects 
Strengthening research structures 
and supporting the creation of 
“national R&D leaders” on some 
Key Enabling Technologies  
Strengthening research structures 
and supporting the creation of 
“national R&D leaders” on some 
Key Enabling Technologies  
Strengthening research structures 
and supporting the creation of 
“national R&D leaders” on some 
Key Enabling Technologies  
Establishing and strengthening of 
"innovation ecosystems for 
sustainability", building "territorial 
leaders of R&D"  

IPCEI_digital 

IPCEI_green 
Partnerships in research and 
innovation – Horizon 
Europe_green 
Partnerships in research and 
innovation – Horizon 
Europe_digital 
Strengthening and sectorial/ 
territorial extension of technology 
transfer centres by industry 
segments  
Fund for construction of an 
integrated system of research and 
innovation infrastructures 
Introduction of innovative 
doctorates that respond to the 
needs of innovation by 
enterprises and promote the 
hiring of researchers by 

102 

M4C2-I1.3-
186a 

M4C2-I1.3-
186b 

M4C2-I1.4-
187 

M4C2-I1.4-
187 

M4C2-I1.4-
187 

M4C2-I1.5-
188 
M4C2-I2.1-
189a 
M4C2-I2.1-
189b 

M4C2-I2.2-
190a 

M4C2-I2.2-
190b 

M4C2-I2.3-
191 

M4C2-I3.1-
192 

M4C2-I3.3-
194 

483 

023 

40% 

483 

022  100% 

480 

022  100% 

240 

023 

40% 

240 

009bis 

100% 

1 300 

900 

019 
021qua
ter 

40% 

100% 

600 

022  100% 

120 

022  100% 

80 

350 

009bis 

100% 

010 

100% 

1 580 

055 

100% 

600 

016 

40% 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
M5C1-I1.1-
198 
M5C1-I1.2-
199 
M5C1-I1.4-
201 
M5C1-I2.1-
202 
M5C2-I1.2-
207 
M5C2-I3.1-
215 
M5C2-I3.1-
215b 

M5C3-I4-220 

M6C1-I1.1-
221 
M6C1-I1.2-
223 
M6C2-I1.1-
224 

M6C2-I1.3-
227 

companies  
Active Labour Market Policies 
(ALMPs) and Vocational Training 

Creation of women's enterprises  

Strengthening the dual system 

Universal Civil Service 
Autonomy patterns for people 
with disabilities 
The Sport and Social Inclusion 
project 
The Sport and Social Inclusion 
project 
Infrastructural investments for the 
Special Economic Zone 
Proximity networks, facilities and 
telemedicine for territorial 
healthcare assistance - 
Community Health House to 
improve territorial health 
assistance 
Home as the first place of care 
and telemedicine 
Digital update of hospitals’ 
technological equipment 
Strengthening of the technological 
infrastructure and of the tools for 
data collection, data processing, 
data analysis and simulation 

4 400 

400 

600 

650 

275 

350 

026 

40% 

350 

025ter 

40% 

630 

078 

40% 

1 600 

025ter 

40% 

1 280 

1 450 

1 673 

016 

40% 

100 

40% 

016 

40% 

099 

40% 

012 

100% 

013 

100% 

095 

100% 

095 

100% 

103