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The Recovery Fund: how to revive Italy’s economy?

Digital format, 30/07/2020, Digital Panel Discussion

Approval of the Recovery Fund is an important sign that Europe is finally ready to embrace a shared development process; what had long seemed a remote possibility has begun to materialize. Nevertheless, the most delicate part of the process – putting political consensus into practise – now begins for the European institutions and members concerned.

This is a particularly critical juncture for Italy, which has always been distinguished in Europe for insufficiency in what the corporate world calls “execution”. Difficulty introducing concrete plans and making the best use of resources have been accentuated for a country that, despite accounting for 13% of overall European wealth, has been the recipient of half of Community resources over the years.

In order not to miss this opportunity, Italy is going to have to follow the two main lines of action on which Europe is hinging its recovery and development plan: the green economy and the digital economy. The two processes converge because the paradigm shift associated with the idea of sustainable development calls for innovations that point directly to a digital economy.

Italy’s espousal of this trend is going to mean a radical modernization of production processes and of the consumer economy. Europe’s underlying strategy is clearly illustrated in its Next Generation EU program, aimed finally at rebuilding a generational pact that was interrupted over recent decades, and it is doing so within a framework of sustainable development.

The generational pact was interrupted particularly brutally in Italy in the mid-1980s with the explosion of the public debt. The Recovery Fund offers an opportunity to resolve this situation, starting with investments in sectors strategic for future generations, such as education, training and research and to both sustainability and the digital economy. The clear objective is to locate young generations in a dignified and active position within the processes of development being triggered.

A necessary discontinuity in the Italian and European economic situation is being sparked by an injection of resources unprecedented by the Marshall Plan. The 200 billion-euro Recovery Fund joins other resources (the ESM, the Sure unemployment funds, ECB interventions, European funds whose expiration has been extended, the authorized budget variance) to reach a total of almost 500 billion euro.

Some of these resources are grant monies, others are loans to be repaid at very low interest rates that make them highly advantageous. In any case, what must not happen is that the funds are wasted. Italy must use this opportunity to make radical changes, proposing and implementing projects capable of finally putting us back on the road to development.