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Commission endorses Italy's modified recovery and resilience plan

24 November 2023

Today, the Commission has given a positive assessment of Italy's modified recovery and resilience plan, which includes a REPowerEU chapter. The plan is now worth €194.4 billion (€122.6 billion in loans and €71.8 billion in grants) and covers 66 reforms, seven more than in the original plan, and 150 investments.

Italy's REPowerEU chapter consists of five new reforms, five scaled-up investments drawing on existing measures, and 12 new investments to deliver on the REPowerEU Plan's objectives to make Europe independent of Russian fossil fuels well before 2030. These measures focus on strengthening electricity distribution transmission and distribution networks, energy security, and speeding up renewable energy production. Measures to reduce energy demand, to increase energy efficiency, to create and strengthen the skills needed for the green transition, as well as to promote sustainable transport are also covered.

The revised recovery and resilience plan includes 145 new or modified measures. This covers the measures under the REPowerEU chapter. These measures seek to strengthen key reforms in areas such as justice, public procurement, and competition law. A number of new or upscaled investments aim to foster Italy's competitiveness and resilience, as well as promote the green and digital transition. These investments cover areas such as renewable energy, green supply chains, and railways.

Italy's changes to the original plan are based on the need to factor in:

  • objective circumstances hindering the fulfilment of certain investments as originally planned, including the high inflation experienced in 2022 and 2023, supply chain disruptions caused by Russia's war of aggression against Ukraine, and the availability of better alternatives to achieve the original ambition of certain investments;
  • the upward revision of its maximum RRF grant allocation, from €68.9 billion to €69 billion, as a result of the June 2022 update to the RRF grants allocation key, which reflects Italy's comparatively worse economic outcome in 2020 and 2021 than initially foreseen.

An additional boost to Italy's green transition   

The modified plan has a strong focus on the green transition, allocating 39% of available funds to measures that support climate objectives (up from 37.5% in the original plan).

The new reforms and the scaled-up and new investments included in the REPowerEU chapter contribute significantly to the green dimension of the plan.

The reforms will accelerate the deployment of renewables through streamlined permitting procedures, reduce environmentally harmful subsidies, facilitate the production of bio-methane, and step up the provision and uptake of the skills needed for the green transition.

These reforms are complemented by a number of new or scaled-up investments. These are geared to increase the efficiency, reliability and security of the electricity grid, increase the production of hydrogen, and strengthen the zero-emission railway and bus fleet. Other investments include support for private companies to improve the energy efficiency of their production process.

Reinforcing Italy's digital preparedness and social resilience  

The Italian plan's digital ambition has also increased, thanks to a number of new investments that foster the development of advanced technologies, support start-ups and invest in research and development. The revised plan devotes 25.6% of its total allocation to support the country's digital transition (up from 25.1% in the original plan).

Italy's modified recovery and resilience plan is also ambitious on connectivity, improves the digitalisation of public administration and of businesses, and promotes the development of digital skills and of technologies.

The modified plan maintains its important social dimension. Several measures in Italy's modified plan are expected to contribute to improving Italy's competitiveness and the Italian economy's resilience. The plan includes measures aimed at enhancing the resilience of the healthcare sector, boosting the effectiveness of active labour market policies, supporting the educational system, and reducing regional disparities.

Next steps 

The Council will now have, as a rule, four weeks to endorse the Commission's assessment. The Council's endorsement will allow Italy to receive €0.5 billion in pre-financing of the REPowerEU funds.

Under the RRF, Italy has so far received €85.4 billion: €24.9 billion in pre-financing and €60.5 billion disbursed in total for the first three payments.

The Commission will authorise further disbursements based on the satisfactory fulfilment of the milestones and targets outlined in Italy's revised recovery and resilience plan, reflecting progress in the implementation of the investments and reforms.  

REPowerEU , NRRP , National Recovery and Resilience Plan
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