The Covid-19 showed the structural vulnerability of the global economic system, which in the first two quarters of 2020 experienced its worst recession since the Second World War.
In a global context of economic slowdown, all Governments and Central Banks, including the ECB, the European Central Bank, have deployed extraordinary measures – both monetary and fiscal – to support businesses in order to absorb the shock caused by the crisis, to ensure their resilience in the period of emergency and to promote their relaunch at the time of recovery.
The seriousness of the situation has prompted the European institutions to agree on the Next Generation EU, NGEU, a powerful temporary tool for relaunching the economies of the Member States.
We wanted to discuss the issue with Valerio Mancini, Director of the Research Centre at Rome Business School and Program Director of the Master in International Management, who said:
“As we know, Italy is the main beneficiary of the Next Generation EU and the PNRR represents an unprecedented opportunity to relaunch the competitiveness of our country: it has an evocative name “Italy Tomorrow” and a total value of 222.1 billion, of which 122.6 billion in low-interest financing from the European Union, 68.9 billion in non-repayable grants and a complementary plan of 30.6 billion. This is an opportunity to reduce inequalities, bridge the territorial gaps between the North and the South and, more generally, rewrite the future also in a sustainable way, through a path of ecological and environmental transition. We are facing the planning of major changes based on a plan of reforms considered indispensable for the modernisation and growth of Italy.”
The digitalisation, innovation and competitiveness of SMEs are also among the objectives of the National Recovery and Resilience Plan. Small and medium-sized enterprises (SMEs), i.e. those with between 10 and 249 employees, are the backbone of the country’s system, which is considered fundamental for relaunching the economy, precisely because they represent 76% of non-financial enterprises. SMEs also include family businesses, such as, for example, those at the heart of the Italian restaurant industry, which makes food and wine a fundamental asset and a driving force for the relaunch of tourism and the underlying economy.
“But technological innovation must also be understood as the renovation of inadequate and sometimes dilapidatedpublic infrastructures such as hospitals, schools and stadiums: the decay of public assets has historically been an obstacle to the homogeneous development of our country, highlighting the gap between North and South,” says Mancini.
“As a Research Centre, we have focused our research on economic sustainability, the circular economy and, in particular, on the future of our cities, which are not considered very smart. Italy is lagging behind in this area: the PNRR funds, earmarked for sustainable mobility and ecological transition, will make up for this gap and change the development model to a greener form of industrialisation.
It will be very important to manage the huge flow of money. This is why it is essential to focus on quality training for the younger generation, teaching them how to deal with new business models. The age range is from 25 to 45, the future of managerial Italy, will have to manage, in fact, financing linked for example to municipalities and local health authorities and will have to be prepared for the vision of general management.”
The PNRR also aims to overcome all social inequalities. Within these objectives, there may finally be room to overcome the gender gap and to promote female empowerment and equal pay (gender pay gap) so as to allow women to cultivate their profession without having to give up their families and to achieve real job sharing.
“I believe it is very important for our country to invest in the economic system that revolves around the over-65s, who represent 22.4% of the total population. The gradual increase in the average age of Italians, second in the world only to Japan, can represent a great opportunity to invest in all those activities that make up the so-called Silver Economy. Being a long-lived country means, in fact, having a very high quality of life: we can therefore take action to transform the third age into a great economic and professional opportunity for the country. This is one of the next challenges from which to start.”
What is the Next Generation EU and what are the 6 missions of the PNRR
The recovery plan incorporated in the seven-year budget 2021-2027 is worth EUR 1.8 trillion and consists of a mix of grants and soft loans. For the first time in the history first of the European Community and then of the European Union, all Member States have formulated a unified response with an aid package, financed through the issuance of European debt securities, to revive the EU economy to make it greener, more sustainable, more digital and more inclusive.
The name, Next Generation EU, is due to the desire to project investment precisely onto the new generations, the fundamental levers of the Union’s future.
In 2020, our country saw a loss of GDP, the Gross Domestic Product, of 8.8%, compared to a drop in the European Union of 6.2%. The coronavirus crisis has brought Italy’s public debt to 160% of GDP, impacting not only on the activity levels of Italian companies but also on their growth strategies. Unemployment and rising inequalities have also led to a critical situation from a social point of view. This is the background to the PNRR, the document illustrating the proposals for allocating Italy’s Next Generation EU resources, approved on 22 June 2021 by the European Commission and on 13 July by Ecofin, the Economic and Financial Affairs Council.
Professor and Director of the Research Centre of the Rome Business School; he has been a visiting lecturer in Argentina, Colombia, Brazil, Cyprus and Syria. He is a lecturer at the Armando Curcio Institute in Rome. He has worked in Italy and abroad with several international (UNODC, UNICRI, MAOC-N and OECD) and national (MISAP, MASTERY and the Youth Committee of the Italian National Commission of UNESCO) organisations. He has published several articles, reportages and academic researches; he was a foreign journalist for the Colombian newspaper “El Espectador” and, since 2010, he has been the Italian correspondent for the radio programme “UN Analísis”. Author of “Football & Geopolitics” (Mondo Nuovo, 2021).