Nova workboard

a blog from young economists at Nova SBE


Recently, public opinion in Italy has been discussing about Europe for several reasons: from the elections last May to the presidency of the Council of the European Union in the six months from July to December. However, 2014 has been a particularly important year because it coincides with the expiry of the seven-year program (2007-2013) of European Structural Funds and with the new definition for 2014-2020.

Europe is not only a distant entity, responsible for monitoring the implementation of promised reforms or respect the constraints imposed by the Maastricht Treaty as it is often perceived, but it is also responsible for supporting the development of the individual states in the direction of Community 2020, especially with the instrument of structural funds. We can distinguish different types of funds: the European Regional Development Fund (ERDF), focusing on regional and urban development; the European Social Fund (ESF), on social inclusion, education and training; the Cohesion Fund (CF), on the economic convergence of the less developed regions; the European Agricultural Fund for Rural Development (EAFRD); finally, the European Fund for Maritime Affairs and Fisheries Fund (EMFF). The main objectives of these investment policies are the convergence of the most underdeveloped areas on more homogeneous targets, the regional competitiveness and employment for all territories outside the EU, not just those underdeveloped, so that they can be better able to attract investment, and, lastly, European territorial cooperation.

The Italian paradox consists in a country, having enormous needs for infrastructure investments, boosting competitiveness but not being able to use the available funds: in fact, of the 28 billion euro allocated by the EU in the 2007-2013 period, the certified expenditure made ​​by Italy and its local authorities only amounts to 13 billion euro, representing an implementation rate of 45%; in the European ranking, Italy is placed third last, just before Croatia (22%, but having just entered the European Union) and Romania (35%) and well below the EU average of 60.81%.

Surely the causes of the inability of spending can be attributed to bureaucracy, poor coordination of different levels of territorial governance and the very high rate of corruption that characterize Italy; a closer inspection, however, draws the attention to the system of co-financing from the Structural Funds. The funds would be used only if there was participation also on the part of the country in question. The additionality principle behind this rule is correct, as it avoids problems of “moral hazard” and it empowers the users of funds; in Italy it has been proved to be counterproductive, though, because in most cases the European funds are used by local authorities but the share of co-financing is paid by the state, not resolving the situation of information asymmetry. In addition, the resources to be allocated to co-financing funds are often blocked by the constraints of the Stability and Growth Pact. In 2012, the Ministry of Territorial Cohesion was able to negotiate a reduction in the share of national co-financing and two additional years to finish using the funds (until end 2015).

Italy appears to be a net contributor country, pouring to the European Union more resources than it receives; despite that, the enormous potential of the use of European funds isn’t being used, even if the situation with the public finance is dramatic. The seven-year program (2014-2020) provides for Italy € 33 billion of investment, rising it to almost 70 billion with the system of co-financing: getting out of this paradox is certainly a necessary condition to start growing.







6. Europeizzazione e politiche pubbliche italiane, Paolo Graziano, Il Mulino editore

Pelloni Stefano


Author: studentnovasbe

Master student in Nova Sbe

Comments are closed.