The EU is working on the future: the objective is to combine Pnrr and structural funds

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While in Italy the spending of the 2021-2027 structural funds is almost at a standstill and the effectiveness of the Pnrr still largely remains to be demonstrated, discussions on the future of European investment policies have begun in Brussels for weeks. In the preparatory work of the next Multiannual financial framework, the post-2027 common budget, we are discussing whether and how to rationalize these two largely overlapping policies.

The discussion for now is at a technical level. We need to decide what to do with the RRF, the Recovery and Resilience Mechanism articulated in the national PNRR plans, created in response to the economic crisis triggered by Covid. It was supposed to be an immediate and temporary instrument, entrusted to the States by linking funding to reforms, based on results and not on costs. As was evident from the beginning, there is a strong overlap with the structural funds (ERDF, ESF+ and European Cohesion Fund). Pnrr and structural funds finance more or less the same things. How to combine these two tools? The idea that is gaining ground is to consolidate the “PNRR model”, with a sort of “grafting” onto the “plant” of cohesion. Some are looking at the “Italian model” of the Fitto reform presented yesterday. But for now it seems like an optimism that is at least premature, if not excessive.

Overlapping but different policies

There are differences between the two policies and they are substantial: the cohesion policy funds, like the agricultural ones in part, have a strong redistributive imprint of wealth and favor the most backward areas of the Union according to the logic of leaving no one behind. Precisely for this reason, and here is the other difference, the management of cohesion funds is largely decided on the territories and therefore entrusted mainly to the regions. Furthermore, in terms of implementation, the RRF is based on performance and therefore disburses resources as the targets are achieved and the reforms are implemented, induced if not imposed by the Commission and negotiated by the Member State: “Down from the top” someone says.

Cohesion, on the other hand, is based on the actual costs of the projects which must be reported. Only following in-depth checks are European payments released. Critics question the real effectiveness of these projects and highlight the delays of multilevel governance. There are projects in the territories, they are implemented and they work, even if too often they are not recognizable as projects financed by European cohesion.

A study presented at the mid-term review in March recognizes that the absence of this territorial dimension in the RRF risks increasing disparities across the Union and within Member States, running counter to the objectives of cohesion policy.