Draghi plans € 220 billion overhaul of Italian economy

Mario Draghi will unveil a € 221 billion stimulus package next week for a radical restructuring of the Italian economy as it seeks to recover from its deepest recession since World War II.

The plan, which includes significant investments in high-speed rail and green energy, as well as the full digitization of the country’s public administration, will build on the EU’s pandemic stimulus fund.

Italy and Spain are expected to be the two main beneficiaries of grants from the program. The Draghi Recovery plan, which is expected to be approved by the Italian cabinet by the end of this week, involves € 30 billion in Italian budgetary resources and € 191.5 billion in loans and grants from the Next Generation EU program, officials said. people informed about the plans.

The plan is critical not only for Italy’s hopes of raising its moribund growth record and accelerating its transition to a more low-carbon, high-tech economy, but also for the credibility of the recovery effort. the EU after Covid 19.

Draghi, the former president of the European Central Bank who was appointed prime minister of an Italian national unity government this year, will present the plans to the Italian parliament early next week.

They will then be submitted to the European Commission – one of the “ national recovery and resilience plans ” that will be presented by the 27 EU Member States after the creation of the 750 billion euro recovery fund during of a historic peak Last year.

Mario Draghi will present the plans to the Italian parliament early next week © Alberto Pizzoli / Pool / Reuters

The Draghi plan will focus on improving the efficiency of the Italian electricity grid, investing in hydrogen projects and other renewable energy sources, and improving the energy efficiency of public buildings, people briefed on the package said.

The investment of EU funds will focus on six areas covering the digital transformation of the Italian economy, investments in the field of climate and environment, infrastructure, education, health and the promotion of inclusion of gender and social inclusion.

Draghi also wants to carry out structural reforms to address long-standing bottlenecks in the country’s legal system and local governments that have hampered growth, people familiar with the prime minister’s plans said.

These include the digitization of public administration procedures as well as an overhaul of the Italian legal system to speed up court proceedings, reorganize the courts and modernize the judicial system.

Italy’s snail-paced legal system has long been considered one of the slowest in the EU and has been blamed by economists as a factor driving foreign investors away. The average time to fulfill a commercial contract in Italy is over 1,100 days, according to the World Bank, almost double the average time in Germany, France and Spain.

Daniele Franco, Italian Minister of Economy, will monitor how reforms and investments are implemented by ministries and regional governments.

The Next Generation EU project requires Member States to submit their plans by the end of April, with the aim of obtaining approval from the European Commission and Member States.

The committee will then consider borrowing up to 750 billion euros on the capital markets, which it will then distribute in the form of grants and loans to EU countries.

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