Enlightened Public Investments, Italian Style

While the UK is now paying the price for its woeful Brexit, Italy is reaping the rewards of its European Union membership as a nearly €200 billion EU-funded spending program is helping the country recover from the COVID recession and repair infrastructure damaged by earthquakes in 2016.

After the earthquakes, parts of Italy got funds from the EU to bring back towns that were partially or wholly destroyed, along with services. Work related to that has been in progress since then, with many buildings being repaired and made livable again. In 2021, the EU allocated to Italy more than €24 billion to further recovery from the pandemic. Because of the typical lag time between funding and actual construction, parts of the country are just now seeing numerous projects underway.

Italy has been diligent in meeting standards set forth by the EU in a number of areas as part of the allocation agreement. It has tightened banking regulations to clamp down on money laundering. It modified laws regarding fiscal expenditures, tax collection, immigration, asylum seekers, airports and seaports. It also adopted energy conservation programs such as home insulation, electric vehicles, and solar power. On our travels, we frequently pass by huge “solar farms,” their hillsides fitted with arrays of panels that slowly turn like sunflowers throughout the day.

The reward for Italy’s diligence has been that this year the country received an EU allocation of €191 billion ($210 billion) for infrastructure projects. The program is known as the National Resilience and Recovery Plan (PNRR). By comparison, the Bipartisan Infrastructure Bill, passed by the U.S. Congress in late 2021, is a roughly $1 trillion package of public infrastructure investments, albeit for a country with a population more than five times bigger than Italy’s and an area 32 times larger. In any case, €191 billion is an astonishing figure.

We started seeing significant changes in our area last year. First, we noticed buildings in bigger towns covered in scaffolding and mesh fabric – indicating a renovation or restoration project. Initially it was public buildings and churches, then it was commercial buildings and apartments. Next, streets were closed off for reconstruction. The center of Ascoli Piceno in our region, which we visit often. is now almost impassable due to dozens of projects occurring simultaneously. We have seen this in other cities, both large and small.

Our own town, Santa Vittoria in Matenano, with barely more than 1,200 people, has seen remarkable changes. A new primary school was created out of an older public building. Old streetlights have been replaced with energy-efficient LED lights inserted into the traditional “gas lamp” fixtures. Fiber-optic cable was installed to every house and business, increasing our internet connectivity tenfold. Most of the buildings damaged by the earthquake have been restored.

A new sidewalk has been installed along the main roadway to the village center. It has new modern lights, trees, handrails, and places to sit. The paving itself is elegant – small granite squares. (This seems to be a template, as we have seen these being installed in many other small towns in the region.) The municipality is about to embark on a total reconstruction of its main piazza, removing parking, expanding the space available to people who want to stroll and sit, and replacing asphalt with thick, traditional granite paving stones.

Our provincial government of Fermo (similar to a county in the United States), has been improving its beachfront towns – a major draw for Italians and visitors from other countries. For many years, our experience of accessing beaches involved paying a fee to a private “beach club” to obtain permission to sit on the beach on a lounge chair beneath an umbrella. The province has been reclaiming those strips of public land, demolishing the beach clubs and their fences, and opening free beaches. The authorities ordered ramshackle bars and restaurants along the beachfront to upgrade or leave when their leases are up. As a result, these waterfronts are now lined with attractive, pleasant restaurants serving families and elderly — not just rowdy, summertime vacationers.

The province didn’t stop there. It removed the continuous row of parking stalls along the seaside roadway and replaced it with a wide promenade and a protected bicycle lane. Now, older people and children stroll freely without danger from traffic. In addition, former parking lots have been replaced by parks with play structures for children, seating for adults, and food concessions for both. The change has been nothing less than spectacular.

However, as with many aspects of life in Italy, local situations vary hugely — by region, by province, and by city. People in other parts of Italy have observed similarly large, unprecedented improvements, while others report seeing few or none. Nathan Heinrich, who lives in the Veneto region and hosts a podcast about moving to Italy, reports an historic bridge being rebuilt, street improvements, new roundabouts, green spaces, and walking paths.

Suzanne Saluti in Ascoli Piceno has witnessed a constantly shifting maze of street and sidewalk closures as pavements are being replaced and adjacent buildings renovated. Churches, apartment buildings, and commercial buildings are encased in steel scaffolds and shrouded in dust-catching fabric. Detours are common both for people in cars and on foot, as utilities are being replaced.

Similarly, Tim Epstein, in his town in Lombardy, reports major drainage projects, reconstruction of parks, new pathways and bridges. So does Nancy Hampton, in her town in central Umbria. Yet 50 kilometers (31 miles) to the east, another person says he has seen no signs of physical improvements in his area. Marco Ercoli in Rome notes that the ancient city has such a morass of old infrastructure that it would be difficult to determine where to even start. One observer has dismissed the plan altogether as politically-motivated “window dressing.” Finally, a correspondent in Sicily blames the lack of enhancements on Northern Italy intentionally – as usual — shortchanging the South.

However, the EU money is not self-implementing. Each region and province must work to present a compelling proposal to get a portion of the PNRR funds. A recent report noted that Italy has a such a tangle of disorganized bureaucracies that some of the EU funds are going unspent. Some projects, such as two proposed sport stadiums, have been rejected by the EU oversight council, which said they weren’t about economic recovery but merely on someone’s wish list.

If that weren’t enough to produce mixed results, the funds were secured under the previous center-left government. And the current center-right government bristles at implementing policies of its predecessor. It’s hard to tell if the absence of investment in some areas is due to incompetence, indifference, ignorance, or sheer obstreperousness.

Nonetheless, it is ironic that the UK is just now discovering the many follies of severing itself from the EU — increased food prices, decreased pensions, and the fleeing of professionals for other countries more supportive of their skills. Meanwhile, Italy is benefitting tangibly from its membership.

Italy has come a long way since my wife and I moved here six years ago and took up residence in our village in the Marche region. At that time, buildings, roads, bridges, and other aspects of the physical environment were showing signs of the two devastating 2016 earthquakes.

Italy is an old country with construction going back many centuries. Maintaining and repairing roads and utility lines here is expensive. Alberto, who sold us our house and became a friend, often exclaimed “problemi serioso!” when commenting on the state of the roads in our area.

For most of our six years of living here we simply adapted. We noted those roads that were rough and rutted and avoided them. We grew accustomed to seeing small temporary cabins occupied by families on the edges of towns that had been declared uninhabitable. We joined our neighbors in walking in the country roads, even though trucks and cars tore by only a meter away. There was no other choice.

But now the rural roads that our friend Alberto complained of are being rapidly rebuilt. In every direction we travel, we see new roadside drainage systems being installed to stem the massive hillside mudflows that typically occur each spring. Concurrently, many of these winding roads with their rutted or missing surfaces are being repaved with state-of-the-art “quiet” paving – a blend of asphalt and recycled tires. Old, battered bridges over rivers, streams, and ravines are being replaced with sturdy structures flanked with steel guardrails and safe walkways.

Italians make a national sport of mocking their political leaders, as some are eminently mockable. They often give these leaders nicknames dripping with sarcasm, such as “The Dragon” for the former prime minister Mario Draghi. “Melons” is used for the current PM Giorgia Meloni – apparently a moniker she herself invited during the pre-election campaign. Despite the sardonic mirth-making and widespread pessimism about bureaucracy, it seems that Italy’s participation in the EU is paying off for Italians. Daily life is being distinctly improved. And that should be precisely the role of government.