Within the framework of the Next Generation EU Laboratory, a meeting was held on the role of infrastructure in the NRRP. Organised with the Rivista Economia Italiana and Confindustria Piacenza, it was an opportunity to discuss the relationship between infrastructure and sustainable growth. We spoke about this with Professor Francesco Timpano, Professor of Economic Policy at the Faculty of Economics of Università Cattolica del Sacro Cuore in Piacenza and Cremona.
Professor Timpano, what are the main indications that have emerged?
"We know, as Davide Ciferri, Minister Giovannini's economic advisor, reminded us, that the NRRP allocates 61.3 billion in infrastructure spending under the MIMS, 56% of which will be invested in the South and 75.7% will be earmarked for combating climate change. Together with the rest of the infrastructure investments activated this year, these resources will help redesign the future of our country, including in terms of reducing territorial disparities and environmental redevelopment. This expenditure is largely concentrated on public works (56 billion euro), particularly railways (36.6 billion euro)".
Why was it decided to focus on such a huge investment in railway infrastructure? And where are the other investments directed?
"The rationale for investments in railway infrastructure is linked to the positive impact they are deemed to have on pollution: our country needs to shift a significant part of the mobility of goods and people from road to rail. The rest of the interventions are destined for urban regeneration, mass rapid transit, upgrading of the vehicle fleet, sustainable and innovative mobility, strengthening of the logistics network, ports and airports, water infrastructures and the development of inland areas, with investments of between 1 and 5 billion euros per sector".
Are there any particular constraints on the type of action to be taken?
"On NRRP investments, the DNHS (Do not harm significantly) principle is strictly applied, i.e. it is not possible to invest in sectors that do not contribute to de-carbonisation objectives and therefore, for example, the renewal of urban bus fleets can only be done for zero emission buses (electric and hydrogen) in line with the European taxonomy on sustainable investments".
What impact are these conditions likely to have?
"Ciferri and Cartenì, of the University of Campania, estimate the direct or indirect activation of added value at 37.8 billion, strongly concentrated in the construction and civil engineering sectors, with an average rate of return of 63%, which does not take into account induced effects. The workforce created or retained is 616,000. The impact is also significant in terms of average rail travel time across the country, which will be reduced by 20%. The most critical issues concern the possible tensions on the labour market, where there will be a shortage of labour supply in the face of rapidly growing demand".
There was also talk of other infrastructure investments, particularly social and environmental ones: what are the results of the planned investments?
"The work of Cipollone and Di Vaio of Cassa Depositi e Prestiti provides an interesting conclusion: the composition of public investments is very important in order to have an adequate impact on growth, inequality and the improvement of environmental parameters. When, after the NRRP, the volume of investments will decrease, we will have to be able to maintain an adequate investment policy mix to minimise the negative impact of the reduction of investments. Only an adequate level of investment in social housing and spatial development, health and education can allow overall economic growth, with a strong focus on the social impact dimension of investments. Investment in transport and telecommunications infrastructure, as well as in the capital of companies in this sector, has a significant impact on economic growth and inequality, as well as on the digital divide. Finally, the environment is better protected if the mix of investments I mentioned is implemented".
The seminar thus provided important tools for his students for the Next Generation EU Laboratory, in which his students of Economic Policy of the graduate programme in Business Management are involved.
"Certainly. As happens every year, the journal Economia Italiana provides analyses that are particularly useful for this teaching workshop because we manage to move from theoretical analysis to policy implications, and we do this through a fruitful interchange between the scientific and academic world and those who professionally deal with these issues within ministerial structures and financial institutions or supervisory authorities. More than 120 students participated in the seminar and will now be able to exploit the results within the group work they are carrying out with the support of experts and professionals, analysing the individual investment measures of the NRRP".
