PNRR - National Recovery and Resilience Plan: what is it and what is new for 2021

The National Recovery and Resilience Plan was sent by Italy to the European Commission after being approved by the Council of Ministers on 29 April. The document, prepared by the Draghi government and 270 pages long, was in fact uploaded to the Brussels digital platform of the Recovery plans of the member countries.

The document prepared by the government contains a detailed account of the reforms that Italy intends to initiate, between now and 2026, to counter the crisis caused by the coronavirus pandemic.

As indicated in the text of the Italian PNRR, Italy is the first beneficiary, in absolute value, of the two main instruments of the NGEU: the Recovery and Resilience Device (RRF) and the Recovery Assistance Package for Cohesion and Territories of Europe (REACT-EU). The RRF alone guarantees resources of 191.5 billion euros, to be used in the period 2021-2026, of which 68.9 billion are non-repayable grants. Italy also intends to make full use of its financing capacity through loans from the RRF, which for our country is estimated at 122.6 billion. The resources of REACT-EU for Italyamount to 13 billion euros.

Funds to which are added the 30.6 billion euro of the complementary fund , financed through the multi-year budget variance approved by the Council of Ministers on 15 April, for a total endowment of 235.14 billion . Italy will have the resources available until 2026, the date by which the national GDP, according to the government's forecasts, will be 3.6 percentage points higher than the base scenario. Palazzo Chigi has defined the PNRR as an “epochal intervention”, the plan, in fact, includes a substantial package of reforms divided into six missions.

The missions of the plan

As stated in the document, the missions of the Plan are: 

• digitization,
• innovation, 
• competitiveness and culture; 
• green revolution and ecological transition; 
• infrastructure for sustainable mobility; 
• education and research; 
• inclusion and cohesion; 
• health.

The resources made available

The RRF resources are divided as follows: for "Digitization, innovation, competitiveness, culture", allocations of 40.

32 billion are foreseen, the objectives are to promote the digital transformation of the country, support the innovation of the production system, and invest in two sectors key to Italy, tourism and culture. 

For the mission "Green revolution and ecological transition", 59.47 billion are allocated and the aim is to improve the sustainability and resilience of the economic system and ensure a fair and inclusive environmental transition . 

Hence the investments and reforms for the circular economy and waste management, which aim to reach ambitious targets such as 65% recycling of plastic waste and 100% recovery in the textile sector. The third mission, "Infrastructures for sustainable mobility", allocates a total of 25.40 billion , and is aimed at the rational development of a modern, sustainable transport infrastructure extended to all areas of the country, with significant investments in high speed . 

The fourth mission, “Education and research”, foresees investments of 30.88 billion euros in order to strengthen the education system , digital and technical-scientific skills, research and technology transfer. The fifth mission, “Inclusion and cohesion”, is earmarked for 19.81 billionwith the aim of facilitating participation in the labor market , including through training, strengthening active labor policies and promoting social inclusion. 

Two focuses: female entrepreneurship and disability . Finally, the sixth and final mission, “Health”, allocates a total of 15.63 billion with the aim of strengthening prevention and health services in the area, modernizing and digitizing the health system and guaranteeing equity of access to care.

Focusing on the theme Transition 4.0 and, in particular, on Mission 1 Component 2 : "Digitization Innovation and competitiveness in the production system" which includes - probably together with Mission 4 Component 2 - the measures of main interest for our companies in terms of promotion of investments in new technologies, technological infrastructures and digital processes, it should be remembered that the financial endowment of the Transition 4.0 plan initially constituted over 10% of the total European funds made available (about 22 billion euros), but was then progressively reduced during the Conte II government (18.8 billion in the latest version of March) up to 13.38 billion eurosin the final version of the document approved by Parliament.

However, the Transition 4.0 plan has not been substantially weakened , because 5.08 billion allocated by the Complementary Fund have been appropriately added to the resources coming from the RRF, therefore, the 4.0 Transition plan will have a total of 18.46 billion available , which will be used to finance:

• Capital goods tax credit: for investments in capital goods 4.0 and intangible capital goods (both 4.0. And standard) and traditional intangible goods with an increase in rates and ceilings
• Tax credit for R & D & I: for investments in R & D & I and for activities related to innovation 4.0, the green economy and design, with increased tax rates and ceilings
• Tax credit for training activities carried out to acquire or consolidate knowledge of the technologies envisaged by the Transition Plan 4.0 up to a ceiling of € 300,000 and to the extent of 50% until 31 December 2022.
• Tax credits for traditional tangible capital goods
• Non-repayable grants and soft loans to support the digital and technological transition, with particular attention to SMEs. These measures are implemented through already operational tools (New Sabatini Law, Digital Transformation, Innovative Machinery)
• Non-repayable grants and / or soft loans for ICT innovations through the updating of existing technology or the creation of new solutions to support commercial activities with a specific focus on cybersecurity issues
• If at the end of March, the sum allocated by the PNRR for the Transition 4.0 plan (net of the former super-amortization) was equal to 18.8 billion, today this sum is equal to 18.46 billion, it remains only to understand how the Government will want intervene to finance the approximately 8.4 billion envisaged for the tax credit for ordinary non-4.0 tangible assets that are not included in the PNRR sent to Brussels, as not in line with EU objectives, but which were originally included in the Transition plan 4.0 nationwide.