NRRP, ECB’s “help” to Italy: “Do well rather than fast”

Brussels – Fast and well: The European mantra on the post-pandemic recovery program, NextGenerarionEU, and the recovery plans (NRRP) that states are expected to implement. A buzzword, however, that the European Central Bank is beginning to reconsider, suggesting that EU institutions and governments abandon their obsession with deadlines to ensure actual implementation of the reforms they need. A point made at the latest ECB Governing Council meeting in July. As stated in the session report, “It was also suggested that in implementing the NextGenerationEU programme, the
emphasis should be more on effectiveness than on speediness, given the
risk of inefficiencies associated with limited administrative capacity
on the part of the implementation authorities.”

In Frankfurt, there is a certain degree of concern and urgency about the need to correct the course before it is too late. It is recognised that we are exposing ourselves to the risk
of waste because we are anxious to utilise the enormous resources
from the Recovery Fund (672 billion) by 2026. As a result, we are failing to
future-proof the economic-productive systems of the eurozone. This consideration offers support to Italy and the government led by Giorgia Meloni, who have long since asked to exceed the dates and implement the NRRP beyond 2026 but were rebuffed by Brussels.

Of course, there is no doubt that an “effective, rapid, and comprehensive” implementation of the post-pandemic recovery program would be one of the factors that would “help promote innovation and increase investment in green and digital transitions”—a concept that was also reiterated at the July meeting—but of the three conditions the one related to timeliness is added postulates and specifics: rapidity must not mean haste. Forward, then, but in a credible way,

also because the situation is not bright.

Concerns are not lacking within the governing council of the Frankfurt institution. “Indicators have pointed to a decline in investment in 2024, amid greater uncertainty” due to geopolitical tensions. More generally, it is put on record how ECB board members acknowledged that “short-term prospects for growth have deteriorated.” Thus, the EU and its eurozone cannot afford, a fortiori, a sloppy implementation of recovery plans. Hence, the suggestion, which is political: focus on the effectiveness of reforms rather than speed.