Bungled EU Fund Deflates Italian Nursery Hopes, in Blow to Meloni

The Italian government of Prime Minister Giorgia Meloni has approved a decree aimed at ensuring strategic coherence in the spending of all EU funds received by Italy, but economists remain cautious about its potential impact. The decree is intended to streamline the allocation and use of EU funds, which have been criticized for being too slow and inefficient in the past.

However, the future of Europe remains uncertain, and the effectiveness of the decree in achieving its goals is still up for debate. The European cohesion policy aims at fostering long-run growth, but the re-programming of Structural Funds due to urgent needs related to the Great Recession, Covid-19, and natural disasters has raised concerns about the policy's effectiveness.

The main goal of the European Cohesion policy is the structural adjustment of less developed NUTS-2 areas by mitigating social, economic, and territorial inequalities across regions. The policy has been in place since the Treaty of Rome (1957) and has evolved over time to address the changing needs of the EU. The Reform of 1988 established four rules governing the allocation of EU Funds to enhance their effectiveness: additionality, partnership, concentration, and programming.

The additionality principle states that cohesion funds should be additional resources and not a way to replace the 'ordinary' regionalized investments of each Member State. The partnership principle highlights the relevance of the involvement of State, regional, local authorities, and other stakeholders during the policy design and implementation. The concentration principle led to concentrating the efforts on the most relevant objectives and the most disadvantaged areas. Lastly, the programming principle encouraged an accurate context analysis during the policy design.

The multi-annual programming and the concentration of resources aim at preventing Structural Funds from being distracted towards objectives contrasting with the mission of regional policy. The distribution of the allocated amounts to the spending areas, as well as the implementation procedures, are established in the Regional (National) Operational Programmes (ROP), which fully determine the official policy framework. The Programmes are subject to prior scrutiny by the European Commission and induce regional (national) authorities to fulfil the European goals and rules of intervention. The strategic programs and the cohesion projects aim to ensure structural rebalancing and therefore necessarily have a long-term outlook.

The Ninth Report on economic, social, and territorial cohesion (European Commission, 2024) notices that cohesion policy interventions have contributed to a fast economic recovery after the Covid-19 shocks, especially for less developed regions. However, the flexibility in diverting EU Funds towards the containment of exogenous shocks of various kinds (economic, environmental, etc.) has triggered a significant debate both among policy makers and researchers.

Camagni and Capello (2015) raised an interesting theoretical reflection about the importance and justification of cohesion policy, especially for regional resilience and to restore the process of inter-regional convergence which was interrupted by the crisis. Some level of flexibility to mobilize funds towards the most affected regions and sectors could be beneficial during shocks. However, the use of the policy to offset the emergencies gives to the policy an unconventional (and unstructured) role of short-term stabilization. The chance of re-programming increases aggregate uncertainty and may have a negative influence on policy implementation.

Given the potential negative impact of re-programming on regional growth, the Italian government's decree aims to ensure strategic coherence in the spending of EU funds. However, the effectiveness of the decree in achieving its goals remains to be seen. The future of Europe is uncertain, and the Italian government's efforts to streamline the allocation and use of EU funds will be crucial in determining the success of the policy.



In conclusion, the Italian government's decree aimed at ensuring strategic coherence in the spending of EU funds is a step in the right direction. However, the effectiveness of the decree in achieving its goals remains to be seen, and the future of Europe is uncertain. The Italian government's efforts to streamline the allocation and use of EU funds will be crucial in determining the success of the policy.