The pressing crisis with the prospect of a prolonged depression requires a clear strategy capable of combining the two short-term and long-term perspectives. The short-term intervention must cover immediate needs with initiatives charged to current public expenditure. At the same time, it is necessary to focus on the long-term perspective to activate public investments for structural recovery. The risk to be avoided is that emergency interventions divert attention from structural development interventions. Both are urgent. Precisely for this reason, clear ideas that can be implemented immediately are needed. In both cases we need huge additional resources. On this front, the question is not the availability of resources. Rather, it is a question of reflecting on how and where to spend them.
Because in the face of the greater ease of making debts, if the money is not well spent, the longer the depression will last and the more difficult it will be to be able to repay the debts. Unless you count on the prospect of cancellation, as Draghi himself has hypothesized. The historical example that comes to mind is post-war amnesties. Which are given to losers. The best hypothesis is, on the contrary, that of emerging victorious from the post-coronavirus crisis, by allocating a large part of the debt to investments to restart development, so as to create the best conditions for repaying the loans received. In this perspective, the planning of the resources to be invested is critical.
THE PROBLEM OF THE EXPENDITURE RHYTHM
The current crisis comes in the very delicate phase of the transition from the programming of the European Structural and Investment Funds (ESIF) 2014-2020 to the new programming 2021-2027. The transition periods between two programming cycles are extremely complex moments for the administrations in charge of managing the European Structural Investment Funds. Past programming data proves it. At the beginning of each new programming cycle, and for at least three years, the pace of spending is low. There are therefore few resources that arrive in the area. This is not an Italian problem, but a slow dynamic inherent in the functioning of the structural funds, as illustrated by the graph relating to the 2014-2020 programming period for the entire EU.
The reasons for this slowness are related to workloads that weigh on the administrations in moments of transition from one programming to another. These are phases in which the managing authorities of the funds must be able to use all the resources of the old programs and prepare the new programs familiarizing themselves with the procedures and rules of the new regulatory framework.
The current crisis aggravates this workload. Proof of this is the recent (correct) proposal from the European Commission which requires the managing authorities to rapidly adapt the current 2014-2020 programs to field further tenders through which to respond to the needs that have arisen due to the health crisis.
THE ITALIAN CASE
These are difficulties that all European managing authorities will experience, not just the Italian ones. In the Italian context the difficulties are greater because the reduction of internal staff due to retirement quota 100 the constraints imposed by the new regulatory framework in terms of use of outsourced resources for technical assistance add up. The rules proposed by the Commission for the next seven-year period 2021-2027 link the possibility of using technical assistance to the progress of program expenditure, thus limiting the possibility of immediately acquiring the necessary skills to instruct interventions in this delicate transition phase .
The outlined picture makes it clear that we are running the concrete risk of delaying for at least two years for the Italian territories (and more generally European) the making of investments generated by the ESI Funds. In this way, our regions, our cities, but above all the most fragile areas will be deprived of the resources necessary to activate the widespread investments which are the key to a faster and more territorially balanced recovery. In a word, fairer.
POSTPON NEW PROGRAMMING
The shortcut to avoid to speed up anti-crisis interventions is re-centralise ESI funds to direct them towards current expenditure rather than investment. The additional development needs highlighted by the crisis would be lost sight of, delaying their solution. To avoid this perspective error, we think it is more consistent propose to the European institutions (Parliament, Commission, Council) of extend the current programming period 2014-2020. In other words, it is a question of acknowledging that, given the increase in investment plans due to the crisis, it is reasonable delay the start of the new programming cycle by a suitable period to be agreed upon currently scheduled for 2021-27. In this way, it is possible to recover the time needed to refinance all existing programs with new resources and reprogram them to adapt them to the emergency and to the new regulation that the Commission will launch to make the ESI funds more flexible for the COVID19 emergency. The advantages of this proposal are obvious:
- Any new resources planned for the period 2021/27 re-allocated on the "old programmes" would be available immediately without the need for new negotiations and the time for approval by the European Commission of new programmes.
- The authorities national and regional management they could focus solely on implementation programs in progress, rapidly putting the resources available to respond to the emergency "on the ground".
- Finally they wouldn't waste time familiarizing themselves with new rules and they could use the monitoring, control and auditing mechanisms already tested in the 2014-2020 regulatory framework.
We are aware that our proposal alters the temporal custom of the Community Cohesion Policy of the Programming cycles. In non-critical times, the definition of new programs involves a healthy innovation in the administrations in terms of processes and contents. But in the presence of a serious and prolonged crisis can we afford it?
°°°°° Pietro Alessandrini is professor emeritus of Economic Policy at the Polytechnic University of Marche and Alessandro Valenza is senior partner of t33
