Minister for Southern and Territorial Cohesion

In particular, it is necessary to reduce the further increasing divide between Northern and . Its consequences are affecting not only the southern communities, but the Country as a whole, held back in its development potential.

[The President of the Italian Republic Sergio Mattarella, 31 December 2019]

Italy has fractures in several areas. Inequalities and divides build up and become stronger across territories. Bridging territorial gaps is not only an act of justice; it is the essential lever to activate the unspoken development potential of our Country. Talks long focused on the immigration emergency, referring to it as an “invasion” for months. Yet they failed to see Southern Italy getting empty, its villages becoming depopulated, the exodus of new generations — that is the real national emergency. Decent employment is certainly missing. And quality services: education, healthcare, mobility. Yet, the main cause of this escape, as well as of the fatigue of those who remain, lies in uncertainty and mistrust as to Southern Italy’s future perspectives ten to twenty years from now. Leaving should be an option; now it is a need again, the only way to improve one’s living conditions. Young people should be free to leave, yet they should also have the opportunity to return. Our task is to guarantee the "right to stay", make Southern Italy not only "attractive" but also a true “attractor”: for investments, people, new ideas. The main objective of the "2030 Plan for Southern Italy" is to ensure a systematic policy and action framework to tackle some of the main challenges for sustainable development in Southern Italy, thus providing the basis for a radical shift in cohesion policy in its eight regions, with a short, medium and long-term perspective. The Plan was devised through a very wide and transparent consultation process, involving all relevant entities and parties at the public, private sector and civil society level. The Plan was adopted by the Italian Government in February 2020, therefore it does not include specific measures to counter the dramatic effects of the Covid-19 pandemic, which hit our Country just a few weeks later. Yet, all the strategic objectives and actions identified in the Plan are extremely timely and coherent also in the framework of the response to the very serious effects of the pandemic in Italy and in its Southern regions, at central, regional and local level. The pandemic confirmed the outmost urgency of translating into action the strategic missions and objectives identified by the 2030 Plan for Southern Italy, which was included in the National Reform Plan sent to the in June 2020. Italy will be what its “Mezzogiorno” will be. No one saves himself or herself alone. The “Southern question” has historically been Italy’s most difficult challenge since its unification. Yet, it is not a lost cause. There is great vitality and innovation capacity in social and entrepreneurial forces, in “active citizenship” expressions, in places that embody possible change, in instances that already perform that model of sustainable development which we want to achieve. Politics has the task to generate and disseminate well-being, accelerate and support virtuous processes, also through extraordinary and ad-hoc measures for workers and enterprises. The prerequisite lies in responding to emergencies and needs, whereby necessary, regaining territories and citizens to legality. Development and cohesion are "missions". They involve not only southerners, but all those engaged in the battle aimed at making Italy a more just and advanced country. Institutions and citizens, politics and society must jointly fight this battle, side by side. Fully aware of the difficulties, of course, but also of the huge array of opportunities that lie before us. We can start a new page. We must write it together.

Rome, September 2020

Giuseppe Provenzano

Table of Contents

1 I. Introduction. A plan for the South is a project for Italy

4 II. Resources. A commitment for the 2020-2030 decade

4 1. The State’s progressive disinvestment over the past decade 5 2. Re-launching public investments over the 2020-2030 decade 5 2.1 A first impact: further 21 billion over 2020-2022 2.1.1. Enhancing the 34% clause 2.1.2. Regaining a national cohesion policy: reactivating the FSC 2.1.3. Enhancing EU cohesion policy implementation BOX 1. ACCELERATING SPENDING OVER 2020-2022

10 2.2 Towards 2030: EU and national resources for 2021-2027 BOX 2. PROGRAMMING 2021-2027 RESOURCES

12 III. Missions. A vision of Southern Italy in 2030 BOX 3. THE 2030 PLAN FOR SOUTHERN ITALY AND THE UN 2030 AGENDA

15 1. A youth-oriented Southern Italy BOX 4. THE UN 2030 AGENDA AND THE FIRST MISSION OF THE 2030 PLAN FOR SOUTHERN ITALY 16 2. A connected and inclusive Southern Italy BOX 5. THE UN 2030 AGENDA AND THE SECOND MISSION OF THE 2030 PLAN FOR SOUTHERN ITALY 20 3. A go-green Southern Italy BOX 6. THE UN 2030 AGENDA AND THE THIRD MISSION OF THE 2030 PLAN FOR SOUTHERN ITALY 23 4. An innovation-frontier Southern Italy BOX 7. THE UN 2030 AGENDA AND THE FOURTH MISSION OF THE 2030 PLAN FOR SOUTHERN ITALY 25 5. A Southern Italy open to the world in the Mediterranean BOX 8. THE UN 2030 AGENDA AND THE FIFTH MISSION OF THE 2030 PLAN FOR SOUTHERN ITALY

28 IV. The first actions in 2020 28 1. A youth-oriented Southern Italy 1.1. Schools open all day 1.2. Countering educational and early school leaving 1.3. Reducing skill-related territorial divides 1.4. Enhancing the school building sector 1.5. Extending the No-Tax Area (without penalising universities) 1.6. Attracting researchers to Southern Italy

31 2. A connected and inclusive Southern Italy 2.1. A more connected Southern Italy: infrastructures and services to break isolation 2.1.1. The “Piano Sud” by the Ministry of Infrastructure and Transport 2.1.2. Secondary road network emergency

32 2.2. A more inclusive Southern Italy: social infrastructures to guarantee full citizenship 2.2.1. The Fund for Social Infrastructures for small and medium-sized municipalities 2.2.2. New day-care nurseries in Southern Italy 2.2.3. Inclusion housing for vulnerable citizens and disadvantaged workers 2.2.4. “Case della Salute”: Healthcare Homes for integrated assistance 2.2.5. Renewing healthcare technological equipment

34 3. A go-green Southern Italy 3.1. "Energy income" for families 3.2. Circular economy experimentation 3.3. Strengthening sustainable transport 3.4. Supply chain and district contracts in the agri-food sector 3.5. Sustainable forest management BOX 9. "CANTIERE TARANTO" - AN EXTRAORDINARY PLAN FOR TARANTO

37 4. An innovation-frontier Southern Italy 4.1. R&D Tax Credit in Southern Italy 4.2. Enhancing ITSs in Southern Italy 4.3. Strengthening the "Fund of Funds" 4.4. Space Economy in Southern Italy 4.5. Technological startups in Southern Italy 39 5. A Southern Italy open to the world in the Mediterranean 5.1. Enhancing Special Economic Zones (SEZs)

BOX 10. ACTIONS AND INTERVENTIONS FOR SPECIAL ECONOMIC ZONES 5.2. The Export Plan for Southern Italy 5.3. Supporting the port system 5.4. Defense for Southern Italy as a border and bridge in the Mediterranean

43 V. Structural policies and urgent measures for employment and enterprise

BOX 11. EMPLOYMENT AND ENTERPRISE IN THE UN 2030 AGENDA

1. Incentivising women employment 2. Investment-related tax credit in Southern Italy 3. "Cresci al Sud" ("Grow in Southern Italy”) 4. The "Protocollo Sud" with Cassa Depositi e Prestiti 5. The "Protocollo Sud" with Invitalia

BOX 12. BENEFITS FOR ENTERPRISES AND ENTREPRENEURSHIP

51 VI. A new method: administrative regeneration 1. Main discontinuity: a cooperative method for enhanced implementation BOX 13. PROMPT IMPLEMENTATION OF THE 2030 PLAN FOR SOUTHERN ITALY BOX 14. THE UN 2030 AGENDA AND THE NEW METHOD INTRODUCED BY THE 2030 PLAN FOR SOUTHERN ITALY

57 2. Monitoring, evaluation, control, transparency 59 3. Countering corruption and mafias 61 4. A programme aimed at strengthening public administrations: 10 thousand young people for development and cohesion BOX 15. A LABOUR PLAN FOR

64 VII. “Being close to places". A new territorial policy 65 1. Re-launching the National Strategy for “Inner Areas” BOX 16. THE NATIONAL STRATEGY FOR “INNER AREAS” TO DATE BOX 17. CULTURE AND BEAUTY TO RE-LAUNCH “INNER AREAS”

69 2. Urban regeneration 71 3. Territorial continuity and insularity 72 4. Flagship projects. A vision of Southern Italy in 2030

75 VIII. Partnerships. Joining “2030 Southern Italy”

75 1. A Network of Talents for Southern Italy 76 2. The “2030 Southern Italy Observatory” 77 3. A participatory path

BOX 18. MILESTONES

82 Essential Bibliography

I. Introduction. A plan for the South is a project for Italy

Reducing disparities at citizen and territory level is not only a national priority for a more united and just Italy, it is our true opportunity to re-launch sound and long-lasting development, resume investments by activating the unexpressed potentials for growth and innovation, and create decent employment opportunities, notably for young people and women. Southern Italy has been experiencing persistent social emergency for too many years. After suffering the effects imposed by the in a more intense way (an uninterrupted seven-year crisis over 2008-2014), Southern Regions somehow improved during the following three years, in line with the rest of the Country yet very distant from EU and averages, thus failing to attain full recovery at production and employment level. The boost deriving from such excessively weak recovery soon came to an end: 2019 forecasts newly hinted at negative GDP in Southern Regions. The levels of economic activity in Southern Regions thus turned out to be stuck again to those recorded in the early 2000s: two decades lost for development, which triggered profound social dynamics. Mass migration outflow, primarily involving new generations, and even most qualified segments of the population, is the most alarming phenomenon affecting Southern Italy’s future scenarios (SVIMEZ 2019a). We now need act urgently and firmly, face the emergency by relying on an ad-hoc strategy: investing in today’s South while looking to tomorrow's Italy. If Southern Regions’ delay truthfully poses the main limit to national development, the opposite is also true: Italy’s conditions fuel the “Southern Question”. For over twenty years, productivity and growth stagnation has been coupled with increasing social and territorial gaps. In order to overcome the crisis and reverse the decline, Italy needs development and cohesion perspectives, requiring at least a ten-year commitment of public action at every level of government. Not everything can and must be delegated to EU cohesion policy financed with Structural Funds - implementation thereof, however, should be improved. As per Article 119(5) of Italy’s Constitution, we need to activate the national cohesion policy lever, set aside over recent years (Parliamentary Budget Office, 2019a; SVIMEZ, 2019b).

1 The fiscal consolidation policies implemented during the years contributed to amplifying territorial imbalances, weakening the welfare state capacity to adequately respond to citizens’ social needs (SVIMEZ-IRPET, 2014). Not even when fiscal policy became more expansive, was national economic policy able to direct the maneuvering spaces opening in the public budget towards investments, to meet production and employment needs (Parliamentary Budget Office, 2017a). Progressive divestment in Southern Regions weakened the "inner engine" of development, with negative consequences for the whole Country. This weakened, also at EU level, even the most developed ’s Centre-North, not as a result of the southern “burden” but due to the lack of contribution deriving from the mutual beneficial effects of economic integration. Economic interdependence between the two Italian macroareas, neglected over the past twenty years of territorial divides, proves very strong. SVIMEZ estimates that every invested in infrastructure within Southern Regions activates 0.4 euro in demand for goods and services within Central-Northern Regions. Based upon ’s estimates, a public investment increase in the Mezzogiorno area equal to 1 percent of its GDP through a decade (approximately 4 billion euros per year) would produce significant expansionary outcomes for the economy1 of the whole Country. Investing in Southern Italy has positive effects on the entire Italian economy; and territorial rebalancing of public investment spending would not only prove effective in Southern Italy but also efficient for the public finances of the whole Country (Panetta, 2019). Over the twenty years of Italy’s substantial stagnation, the geography of territorial gaps has even become more complex: alongside the fracture between North and South, the divergence between centres and peripheries, de-industrialised cities and countryside, urban areas and so-called “inner areas”, has increased throughout the Country. These phenomena confer a further "national" connotation to the debate on territorial cohesion, traditionally associated with the “Southern Italy’s Question”. Credibility and trust in development and cohesion policies must now be recovered. Credibility as to the capacity to carry out planned interventions and produce tangible changes and improvements in citizens' lives. And trust in building a new Southern Italy that, over the next decade, can turn from the main problem into the great opportunity for a Country that wishes to regain an international role and positioning. Southern Italy is not a "lost cause". In spite of weak production dynamics, worsened by increasingly extensive corporate crises, which have excluded a growing percentage of citizens from the labour market and extended the pockets of poverty and unease to new segments of the population, a "resilient" Southern Italy does exist: a network of enterprises (albeit relatively small) that have

1 “In the South, the public investment multiplier could reach a value of approximately 2 in the medium-long term, benefiting from complementarity between public and private capital and from productivity gains associated with greater provision of infrastructure. The economy of Italy’s Centre-North would benefit from it, thanks to greater demand in the South, and commercial and production integration between the two macroareas of the Country. Although the hypothesised public stimulus has smaller dimensions compared to Italy’s Centre-North economy, simulations hint Southern Italy’s GDP could increase up to 0.3 percent" (Panetta, 2019).

2 proven able to face and successfully respond to international competition challenges, and have indeed invested in sectors such as tangible and intangible, social and environmental infrastructure, also thanks to some regional industrial policy instruments and despite widespread public disinvestment. In spite of hostile rhetoric describing Southern Italy for twenty years as a "ball and chain" or a "pot of holes", a “responsive” Southern Italy exists: in 2015, a modest increase in public investment, linked to the closure of 2007-2013 EU programming, was sufficient to determine an increase in Southern Regions’ product and employment higher than in the rest of the Country, demonstrating Southern Italy’s strong capacity to respond to public action stimulus (SVIMEZ, 2016). As by now evident, increasing resources is not enough, though. Spending power and quality should be improved. A project is needed, along with public administrations’ capacity to adopt a mission- based approach and achieve results, producing immediate effects and offering perspectives. By definition, a project is based on a medium-term change vision, which in turn can develop if it impacts current context conditions instantly and powerfully. A project does not only set out the objectives pursued, it also indicates how to pursue such objectives, and specifies the timing required, the commitments undertaken, and the responsible entities designated. A project is a collective action: it demands sharing, cooperation and common action towards clearly set out and understandable objectives. A project means organised action for change, taking into account the overall design yet consciously focusing on those priorities that are crucial development challenges and enabling conditions for growth of all the components of Southern Italy’s economy. The 2030 Plan for Southern Italy aims to do all this, laying down in the following pages: resources to be activated and missions to be pursued, needs to be addressed and opportunities to be seized, first actions to be implemented and results to be achieved, procedures to be improved and processes to be monitored, tools to be utilised and entities to be involved.

3

II. Resources. A commitment for the 2020-2030 decade

1. The State’s progressive disinvestment over the past decade

The lever to bridge current gaps and resume development lies in re-launching public and private investments, rediscovering the value of North-South interdependence and the territorial dimension of cohesion. In order to produce income and employment, the accumulation process must be restarted across the Country, reversing the declining trend in investments that has mainly affected Southern Italy (Agenzia Coesione Territoriale, various years; Banca d’Italia, 2019a). Over the last twenty years, Southern Italy - the so-called Mezzogiorno region - has undergone systematic disinvestment, with few and modest interruptions. In spite of clichés, the level of per- capita expenditure in Southern Italy is significantly lower than in the rest of the Country: a gap to be bridged both on current expenditure (by setting essential levels of benefits [so-called LEP] and effective equalisation mechanisms), and on overall capital expenditure. The 2030 Plan for Southern Italy is specifically aimed at the latter objective. Southern Regions and the whole of Italy record a level of public capital expenditure that is structurally too low. Based on the overview provided by the Sistema dei Conti Pubblici Territoriali within the Territorial Cohesion Agency (ACT) in 2019, the overall capital expenditure of public administrations in Southern Regions more than halved in 2018 versus 2008 (from 21 to 10.3 billion euros), thus undergoing relatively more intense deterioration than the however significant decrease recorded in Centre-North Regions (from 40.7 to 24.2 billion euros). In addition, public administrations’ ordinary capital expenditure (6.2 billion euros in 2018 in absolute value in Southern Regions) accounts for only 22.5% of the national value, well below Southern Regions’ weight in terms of population (about 34%) - i.e., an absolutely inadequate level, which partially nullifies the effects of EU and national cohesion policies. A significant impact in terms

4 of convergence cannot be expected from cohesion funds, if instead of “integrating” ordinary policies, they are utilised to "replace" such policies. The crowding-out effect is confirmed by the following data: in Southern Italy, additional resources represent on average more than half the overall capital expenditure by public administrations, with a peak recorded in the closing phase of the 2007-2013 EU programming period (66.3% in 2015). For several years, EU cohesion resources have tendentially performed a twofold substitution function: both regarding constantly declining ordinary resources and additional resources from national cohesion policy. The latter, financed through the Development and Cohesion Fund (FSC - Fondo Sviluppo e Coesione), have substantially been set aside in recent years, recording a drastic decline in implementation: FSC expenditure decreased from 4.5 billion euros in 2008 to 1.2 billion euros in 2018. If we furthermore consider that interventions co-financed by European Structural and Investment (ESI) Funds in the current 2014-2020 programming period are progressing very slowly compared to EU average levels, despite successfully meeting N+3 targets at end-2019 (also thanks to the valuable work performed by ACT, in terms of assistance and support to managing authorities, also at EU level), the final result is a ten-year process of progressive financial disengagement for development and cohesion policies in the Mezzogiorno region.

2. Re-launching public investments over the 2020-2030 decade

Remedying this lengthy disinvestment process requires a ten-year long path aimed at re-launching public and private investments: that is why we need a 2030 Plan for Southern Italy. A public investment action to be developed over a decade can guarantee adequate time for effective programming and broad financial reach for interventions, also to avoid no-stop resort to reprogramming measures (aimed at speeding up spending and, nevertheless, often ending up causing implementation delays and crowding-out effects between investment funds). And yet, to take shape, the 2030 Plan for Southern Italy requires instant mobilisation of resources.

2.1. A first impact: further 21 billion euros over 2020-2022 The short-term objective pursued by the 2030 Plan for Southern Italy (to be attained over the 2020- 2022 three-year period) consists in maximising the impact of measures provided for by Italy’s 2020 Budget Law, so as to enable increasing public investment in the Mezzogiorno region without further burdening public finances, by rebalancing ordinary expenditure and accelerating additional expenditure, both cash and accruals. This objective can be achieved by: (i) Rebalancing ordinary resources, with effective application of the so-called “34% clause”; (ii) Recovering the spending capacity of Italy’s national cohesion policy (FSC); (iii) Enhancing the implementation of ESI Funds programming.

5 2.1.1. Enhancing the “34% clause” Italy’s 2020 Budget Law enhanced the “34% clause”, thus operating a small «Copernican revolution» versus the formula introduced in 2016 (Article 7-bis(2) of Decree-Law No. 243 of 29 December 2016), This change allows shifting from mere ex-post monitoring over compliance with the principle of territorial rebalancing, without real binding nature, to a stringent regulatory constraint for administrations. In particular, the new provision establishes that any distribution of funds, however named, aimed at growth or support of investments throughout the Country, without allocation criteria or indicators, shall be defined ex ante in line with the objective of providing the actions addressed to the eight Southern Regions with an overall volume of ordinary capital allocations at least proportional to the reference population. Increasing the financial effort of ordinary policies through the "34% clause" could enable for territorial rebalancing of public investments within a given amount of public capital expenditure, which should also be increased against the decline experienced in recent years. The "reserve" would enable attaining an indirect and not obvious effect that has hitherto been lacking: guaranteeing respect of principles stipulating that cohesion policy resources, both European and national, shall be “additional”, hence “extra”. As a result, effectiveness has substantially decreased, not only at financial level (the substitution role played by additional resources was, however, insufficient to compensate for ordinary expenditure deficits), but also in terms of programming quality and strategic coordination of regional development policies versus general ordinary policies. The monitoring rules, to be issued via DPCM (Decree of the President of the Council of Minister) by 30 April this year, upon proposal by the Minister for Southern Italy and Territorial Cohesion, involve not only the Ministry of Economy and Finance (MEF) but also the political Authority delegated with investment at the Presidency of the Council of Ministers (PCM), precisely in order to engage the whole Government in attaining the goal pursued. The rebalancing action via the "34% clause" must be applied both to the resources already allocated and to those not yet assigned (which in the past did not comply with the 34% clause), and, of course, the new resources allocated for the 2020-2022 period by Italy’s Budget Law. Remedying the 34%-clause-related delay - Within the overview outlined above, it is first and foremost necessary to bridge the "distance" built up in recent years between the share of ordinary capital expenditure in Southern Italy and the 34% target. Prudential estimates quantify such recovery at an additional financial commitment of approximately 5.6 billion euros for the entire 2020-2022 three-year period. Indeed, this is the overall amount resulting from the delay accumulated in the 2016-2018 three-year period, when central authorities allocated to Southern Italy slightly less than 20% of the ordinary resources destined for capital expenditure, equal to about 13 billion euros annually. By reversing this trend, with the same national resources, 13.2 billion euro State investments would then be possible in Southern Italy over the next three years (34% of 39 billion euros), versus 7.6 billion euros allocated for 2016-2018, with a 5.6 billion euro increase in resources. Applying the 34% clause to the 2020 Budget Law - Italy’s 2020 Budget Law provides for almost 6.8- billion-euro additional capital expenditure for the 2020-2022 three-year period, of which:

6 approximately 6 billion euros without a destination established by law2. Therefore, by applying the 34% clause to the new resources allocated for 2020-2022 by the Budget Law, greater investment expenditure will be obtained in Southern Italy over the next three years equal to more than 2 billion euros, which would add to pre-programmed resources. Overall, effective implementation of the new 34% clause will result in higher resources for investments in Southern Italy equal to at least 7.6 billion euros in the 2020-2022 three-year period.

2.1.2. Regaining a national cohesion policy: reactivating the FSC Intensifying capital expenditure in Southern Regions also requires reactivating the national lever of cohesion policy, which has substantially been unutilised over the past years. As a matter of fact, the spending capacity on Italy’s Development and Cohesion Fund (FSC - Fondo Sviluppo e Coesione) has drastically decreased in recent years: at 31 October 2019, the implementation progress of actions financed with FSC 2014-2020 was very disappointing, with mere 3.3% advancement of payments out of the overall programmed resources. Expenditure acceleration efforts in the last quarter of 2019 enabled reaching approximately 2.7-billion-euro outflows, thus recording an approximately 60% increase versus 2018. Although the latest verification of implementation progress is underway for the purpose of reprogramming resources, which should slightly improve the level of absorption, what emerges to date is unacceptable for a territory still affected by such serious infrastructure delays and extremely divergent economic performance dynamics versus the rest of Italy and Europe. Therefore, the 2020 Budget Law amends the reprogramming mechanisms to accelerate the spending capacity of central and regional administrations. A new reprogramming action to speed up interventions - Pursuant to Article 44 of Decree-Law No. 34 of 30 April 2019, as amended by 2020 Budget Law, the multitude of current programming documents on FSC use over 2000-2006, 2007-2013 and 2014-2020 (also including resources from the former national Fund for underutilised areas (FAS - Fondo Aree Sottoutilizzate) is undergoing extensive reorganisation. Upon proposal by the Minister for Southern Italy and Territorial Cohesion, CIPE (Italy’s Inter-ministerial Committee for Economic Planning) shall approve a single operational plan on development and cohesion (a.k.a. Piano Sviluppo e Coesione) for each administration in charge of interventions, within a unitary management and monitoring approach and with a view to procedural simplification and better implementation of interventions. Following the recent regulatory amendments, the "Piano Sviluppo e Coesione" may, upon first approval, lay down: interventions endowed with executive project-designing or initiated award procedures, as per monitoring data at 31 December 2019; and interventions that, following consultation with the administration in charge of resources, are in any case assessed positively by DPCoe and ACT, as deemed compliant with the

2 These programmatic estimates are furthermore conservative compared to the assessments issued by the Parliamentary Budget Office, which estimates the amount of "territorial destination" allocations at approximately 6.5 billion euros (likely to be distributed as per the criteria introduced by the Draft Budget Law (DDL) 2020 (Ufficio Parlamentare di Bilancio, 2019b).

7 cohesion policy "missions" set out in the Update to the Economic and Financial Document (Italy’s DEF) for 2019 and with the strategic objectives of funds programming cycle (see infra). Scheduled actions and interventions may be upheld in the above plan if they generate legally binding obligations by 31 December 2021. In all other cases, current FSC allocations fall within the scope of reprogrammable resources, consistently with the "missions" and strategic objectives envisaged by the 2030 Plan for Southern Italy. Accelerating the FSC spending - In recent years the FSC average spending pace has stood slightly below 2 billion euros annually (average recorded in the last seven years), versus approximately 4.5 billion euros per year during the previous seven-year period. Hence, the minimum objective pursued by the FSC new reprogramming in 2020 lies in speeding up its implementation to regain the pre- crisis spending levels. The target will be reached already in the 2021-2022 two-year period, with substantial acceleration also in 2020. According to conservative estimates, spending will amount to 3.5, 4.5 and 4.5 billion euros in 2020, 2021 and 2022, respectively. This will entail approximately 6.5-billion-euro higher expenditures in the three-year period versus recent declining trends, nearly equivalent to one fifth of the funds not yet spent.

2.1.3. Enhancing EU cohesion policy implementation EU cohesion policy has for several years been the sole safe harbour of public policies in Southern Italy, versus the disinvestment by the State. Nevertheless, the implementation of the 2014-2020 European Structural and Investment (ESI) Funds programming has progressively declined: on the one hand, its "twofold substitution application” (for ordinary and additional national resources) has strongly reduced its effectiveness and impact; on the other hand, the loss of public administrations’ construction and project-designing capacity, at every level of government, has led to accumulating delays, and low absorption of resources versus the EU average, swinging between procedural slowness and emergency logics. In this context, ACT kept performing a crucial role. By working alongside the Management Authorities of Operational Programmes (OPs) and ensuring constant coordination with DG Regio (European Commission), ACT made a decisive contribution to preventing loss of EU resources in 2019 within some OPs struggling to reach the spending targets pursued. Such result should fall within the exercise of sound ordinary administration; conversely, it involved intense and not obvious efforts. Between September and December 2019, more than 3-billion-euro spending was overall reported. Over the years, commitment on financial reporting, necessary and indispensable, has distanced ACT from its other original mission: performing as an Agency aimed at carrying out interventions, standing close to territories and local administrations. A reform of ACT will be crucial to tackle the structural problems of ESI Funds implementation, in order to "rescue" the current 2014-2020 programming cycle. Securing the 2014-2020 programming - The effort accomplished to accelerate ESI Funds expenditure, which indeed enabled complying with N+3 targets at end-2019, has not solved some problems that still make it difficult to achieve the N+3 spending targets, notably within specific programmes: the targets pursued imply planned expenditure for the next three years equal to over

8 15.5 billion euros for transition and less developed regions. The objectives pursued by the 2030 Plan for Southern Italy (also through the new method and the administrative regeneration objective) include guaranteeing the attainment of the spending targets pursued. Based upon the ESI Funds spending trends in recent years, and since the level of expenditure in the corresponding period of the previous programming cycle amounted to approximately 12.5 billion euros, achieving the current N+3 targets would result in higher expenditure concentration for approximately 3 billion euros in the 2020-2022 three-year period. Early implementation of the 2021-2027 programming - Slow launch of programmes, among other factors, caused qualitative-quantitative delays and deficits within Structural Funds implementation, notably over the 2014-2020 cycle. Without dwelling on the several causes that generated this weakness (vulnus) - many of which are common to other Member States, linked to the complexity of programming and implementation mechanisms - it should be noted that during the first two years less than 0.1% of allocated resources had been spent, while in the third year alone the expenditure then settled around 7% of total allocated funds. The new programming must start on time, in line with other EU Countries; therefore, 2020 will be focused on preparing the Partnership Agreement and defining the multiple OPs to be implemented. In particular, within the new programming, we intend to set a spending target equal to 7% of the overall budget for the first two years, thus accelerating the spending capacity by at least one year versus the previous cycle: the result of such acceleration can be quantified at approximately 3.9 billion euro higher expenditure in the 2021- 2022 period.

Box 1. accelerating spending over 2020-2022

The actions on which the Government's activity will focus to re-launch investments in Southern Italy over 2020-2022, with the same available resources and without additional charges for public finance, will guarantee greater allocation of resources and capital expenditure capacity equal, on an average, to approximately 7 billion euros, namely 1.8 per cent of Southern Italy’s GDP.

Re-launching investments in Southern Italy over 2020-2022 (million euros)

34% recovery on ordinary expenditure (capital) *5,600 34% target on new funds as per Budget Law 2,000 Spending capacity recovery - FSC *6,500 Acceleration of expenditure for ESI Funds 2014-2020 3,000 Advance set-up of ESI Funds 2021-2027 3,900 Total 21,000

Capital expenditure increase value (annual average) 1.8% of Southern Italy’s GDP

* Minimum target

9 2.2. Towards 2030: EU and national resources for 2021-2027

An essential part of the 2030 Plan for Southern Italy will focus on the new programming activity of national and European cohesion policy resources for 2021-2027: temporal shifting of payments from ESI3 Funds and FSC resources extends the investment time horizon to 2030, in line with the ten-year commitment underlying the 2030 Plan for Southern Italy. As reported in Box 2 below, the overall amount of additional resources for Southern Italy proves significant, equal to approximately 123 billion euros. Combined with rebalanced ordinary capital expenditure, we will have available an impressive lever to trigger convergence processes. Never as in the 2020-2030 decade, however, must we not focus on the size of available resources, rather on: the strategic missions pursued, the quality of actions and projects, and the ability to carry out the planned interventions in full transparency and legality. 2021-2027 Development and Cohesion Fund (FSC) - In order to strengthen national cohesion policy, in the next programming period the percentage share of GDP allocated to the FSC is to be increased from 0.5% (current programming cycle) to 0.6% (on a par with previous programming cycles). This proposal will result in overall FSC budget equal to 73.5 billion euros for the entire 2021-2027 period. The territorial destination constraint in Southern Italy will be maintained at 80%. The 2021-2027 FSC programming will take on the strategic, organisational and procedural innovations set out by the 2030 Plan for Southern Italy, aimed at reactivating national cohesion policy lever to strengthen central level safeguard. The programming activity will be the subject of an ad-hoc partnership path aiming to identify intervention priorities to be implemented through a national development and cohesion plan for each mission pursued by the 2030 Plan for Southern Italy, with a view to ensuring complementarity with ESI Funds programming. The five development and cohesion plans will be complemented with a Development and Cohesion Plan for "Administrative Regeneration", to provide local authorities with support within the investment and administrative capacity strengthening process. For each mission, a steering committee will be set up with strategic coordination functions for implementing the actions set out in development and cohesion plans. ESI Funds 2021-2027 - The Italian Government will be engaged in closing the negotiations on the 2021-2027 Multiannual Financial Framework (MFF) with the declared objective of defending cohesion policy, which some Member States would instead like to see considerably downsized. As part of the negotiations, Italy aims to either maintain or increase the resources of the assigned ESI Funds compared to the previous programming period. The Partnership Agreement (namely, the fundamental document on ESI Funds programming) will be a more streamlined document with clear indication of the priorities pursued at strategy/policy and action level. Drafting of the Partnership Agreement is already in progress, in order to set up OPs as early as possible, versus the delays accumulated within previous programming periods. In the next cycle, the Partnership Agreement must be characterised by marked discontinuity in the direction of: i) strong concentration on

3 Within the negotiations on EU rules for ESI Funds implementation, the Italian Government supports the opportunity to either maintain the N+3 rule or provide for gradual return to the N+2 rule. 10 strategic objectives and actions; and ii) consolidation of programmes, and simplification of procedures. To date, pending the negotiations on the 2021-2027 MFF, it is possible to estimate in a prudent yet realistic way the amount of resources made available to Italy for the new programming cycle in less developed regions, which however would be weakened by the minimum national co-financing rates proposed by the European Commission. Italy, on the other hand, aims to maintain the current territorial allocation criterion as to national additional resources, and hence meet Southern territories’ legitimate expectations, confirming the current level of national co-financing from the Revolving Fund (Box 2 below).

Box 2. Programming 2021-2027 resources

Additional estimated resources for Southern Italy until 2030 (million euros)

ESI Funds 2021-2027a 30,750 National co-financing (Revolving Fund 2021-2027)b 23,415 c Other territorial co-financing 2021-2027 5,261 Development and Cohesion Fund 2021-2027d 58,800 FSC 2014-2020 additional resources as per 2020 5,030 Budget Law e Estimates Total 123,256 a. All the Regions considered for 2021-2027 ESI Funds estimates, based on the original hypotheses on EU Cohesion allocation by the Commission, are located in Southern Italy - namely, the so-called Mezzogiorno area (, , Campania, , , and (less developed regions over 2021-2027), plus (transition region over 2021-2027). These figures represent the total amount, and therefore include the 3.9 bn euro share indicated in Box 1 as "Advance set-up of ESI funds" for 2020-2022.

b. The figure provides an estimate of the Revolving Fund contribution to the national co-financing of 2021-2027 ESI Funds: assuming a widened national contribution versus the minimum rate hypothesised by the European Commission for less developed and transition regions; considering a NOP-ROP ratio impact similar to that experienced in the 2014-2020 cycle; and consistently with the current rules on the distribution of the national co-financing charge between the Revolving Fund and other co-financing sources, depending on PON- or POR- type programmes. c. The figure provides an estimate of territorial finance contribution to the national co-financing of 2021-2027 ESI Funds based upon the same assumptions as per Note b. d. Resources assigned to the Mezzogiorno region, applying the 80% territorial destination constraint. e. Thanks to additional financing from Italy’s 2020 Budget Law, residual 2014-2020 FSC resources are worth approximately 47.9 billion euros, versus 41.7 billion euros in the previous year. Considering the 80% territorial destination constraint, the additional share of resources for Southern Italy is worth approximately 5 billion euros.

11

III. Missions. A vision of Southern Italy in 2030

Identifying and allocating higher resources to enable investments in Southern Italy would prove a weak and ineffective operation if it were not complemented with a well-defined and easily identifiable by citizens strategy - a vision of Southern Italy in 2030. A perspective guiding socio- economic forces and inspiring their commitments and expectations. Cohesion policy, reorganised consistently with the logic of the 2030 Plan for Southern Italy, lends itself to a mission-oriented approach (Mazzucato 2018), as it identifies specific objectives on which public policies should be mobilised. Cohesion missions require going beyond a mere sectoral approach and aim to generate changes with significant social impact in the medium and long term. The Update to Italy’s Economic and Financial Document (DEF), approved by the Council of Ministers on 30 September 2019, identifies five major national cohesion missions on which investments should be focused, in view of the closure of Partnership Agreement negotiations on post-2020, and in line with FSC reprogramming. The missions have been further outlined in the 2030 Plan for Southern Italy, and are itemised as follows: (i) A youth-oriented Southern Italy: Investing in the whole education chain, starting from the fight against child educational poverty, to strengthen human capital, reduce inequalities, and reactivate social mobility; (ii) A connected and inclusive Southern Italy: Increasing and modernising material and social infrastructures to make Southern Regions connected and enhance their social inclusion, breaking the isolation of some areas of Italy’s Mezzogiorno and its disadvantaged citizens; (iii) A go-green Southern Italy: Enhancing Green Deal commitments in Southern regions and “inner areas”, to attain specific goals pursued by the UN 2030 Agenda, and mitigate climate change risks; (iv) An innovation-frontier Southern Italy: Supporting technology transfer and strengthening networks between research and enterprises in the context of a new industrial policy strategy;

12 (v) A Southern Italy open to the world in the Mediterranean: Enhancing the international vocation of Southern Italy’s economy and society, adopting a Mediterranean strategy approach, also through enhanced Special Economic Zones (SEZs) and via development cooperation programmes. The five missions pursued by the 2030 Plan for Southern Italy have been tailored consistently with the investment needs identified by the latest analyses on Southern Italy hereby referred to (SVIMEZ, Bank of Italy, Confindustria-Cerved, Fondazione Ugo La Malfa). The five missions also respond to remarks and recommendations provided by the European Commission in its Country Report Italy 2020 (European Commission 2020; and, previously, in the specific recommendations as per Annex D on investment needs 2019a), and to most recent proposals from socio-economic parties (Confindustria-CGIL-CISL-UIL, 2019). The 2030 Plan for Southern Italy sets out medium-term prospects for each mission in terms of expected results, and outlines some opening actions to be activated in 2020. National cohesion missions are consistent with the Policy Objectives (POs) set out by the European Commission for 2021-2027 cohesion policy, and namely: a) A smarter Europe, by promoting smart and innovative economic transformation (PO 1); b) A greener carbon-free Europe, by promoting a fair transition towards clean energy, green and blue investments, circular economy, climate change adaptation, risk management and prevention (PO 2); c) A more connected Europe, by strengthening mobility and regional connectivity to TLCs (PO 3); d) A more social Europe, by delivering on the European Pillar of Social Rights (PO 4); e) A Europe closer to citizens, by promoting sustainable and integrated development of urban, rural and coastal areas and locally-led initiatives (PO 5).

The strategic horizon of the ten-year perspective underlying the 2030 Plan for Southern Italy responds to the sustainable development challenge launched by the UN 2030 Agenda, for overall public action in the Mezzogiorno area and, first and foremost, for the new development and cohesion policy.

Box 3. The 2030 Plan for Southern Italy and the UN 2030 agenda

In 2015, 193 countries around the world, including Italy, signed the United Nations Global

Agenda for Sustainable Development (UN 2030 Agenda), setting out 17 goals (Sustainable Development Goals - SDGs) and 169 targets to be reached by 2030. As known, the approval of the UN 2030 Agenda unmistakably recognised the unsustainability of the current development model, not only at environmental level, but also at economic and social level, overcoming the idea that sustainability is a merely ecological issue and affirming an integrated vision of the different dimensions of development. The 17 Sustainable Development Goals strongly match the five missions pursued by the 2030

13 implementing the UN Agend Plan for Southern Italy and, above all, highlight the relevant role played by such missions in Italy. The Mezzogiorno area is ranked among Italy’s most exposed areas to the effects of climate change and social and territorial marginalisation processes resulting from the current development model. Hence, in the framework of the missions pursued by the 2030 Plan for Southern Italy, it is essential to finance actions and interventions that, consistently with the Green Deal spirit, allow for a just ecological transition, contributing to the transformation towards a low-carbon economy, while protecting most vulnerable people within a more inclusive and fair society. The key principles underlying the 2030 Plan for Southern Italy require that, in order to guarantee actually sustainable development, all the missions herein pursued will look to the UN 2030 Agenda and its Goals in a mutually interdependent way, so as to avoid producing results that enable achieving only some goals, while possibly damaging some others. The policy proposals set out in the 2030 Plan for Southern Italy, as well as the initial actions consistent with the missions pursued, offer a significant contribution to achieving several targets laid down in the UN 2030 Agenda, intersecting the whole list of its Sustainable Development Goals. The first mission, "A youth-oriented Southern Italy", by intervening on the education chain to strengthen human capital, reduce inequalities and reactivate social mobility, strongly impacts on achieving Goal 4 (Quality education), Goal 8 (Decent work and economic growth), and Goal 10 (Reduced inequalities). The second mission, "A connected and inclusive Southern Italy", has an impact on several important SDGs of the UN 2030 Agenda, and notably Goal 9 (Industry, innovation and infrastructure), Goal 11 (Sustainable cities and communities), as well as Goal 1 (No poverty), Goal 3 (Good health and well-being), Goal 4 (Quality education), Goal 5 (Gender equality), Goal 8 (Decent work and economic growth), and Goal 10 (Reduced inequalities). The third mission, "A go-green Southern Italy", of course intersects most of the UN 2030 Agenda SDGs, contributing to achieving Goal 2 (Zero hunger), Goal 3 (Good health and well-being), Goal 4 (Quality education), Goal 6 (Clean water and sanitation), Goal 7 (Clean and accessible energy), Goal 8 (Decent work and economic growth), Goal 11 (Sustainable cities and communities), Goal 12 (Responsible consumption and production), Goal 13 (Climate action), Goal 14 (Life below water) and, eventually, Goal 15 (Life on land). The fourth mission, "An innovation-frontier Southern Italy", is addressed by the UN 2030 Agenda, notably within Goal 8 (Decent work and economic growth), but also and above all within Goal 9 (Industry, innovation and infrastructure). The fifth mission, "A Southern Italy open to the world in the Mediterranean", is connected to Goal 9 (Industry, innovation and infrastructure), Goal 10 (Reduced inequalities), and Goal 17 (Partnerships for the goals). Within the 2030 Plan for Southern Italy, some of the 17 Sustainable Development Goals are pursued by means of "structural policies and urgent measures for employment and enterprises" - which will contribute to achieving Goal 5 (Gender equality), Goal 8 (Decent work and economic growth), and Goal 9 (Industry, innovation and infrastructure) - and above all with the "new territorial policy" which, through the re-launch of the National Strategy for “Inner Areas” and the “regeneration of urban contexts”, offers its contribution to the implementation of the UN 2030 Agenda by applying an approach based on "being close to places". Eventually, the “New Method - Administrative Regeneration” should positively impact on Goal 16 (Peace, justice and strong institutions).

14 Within this strategic horizon, the re-launch of public and private investments, which we want to initiate through the 2030 Plan for Southern Italy, responds to the priority objectives to ensure, in the Mezzogiorno area, marked competitive progress of the production system, and significant improvement in the quality of work; and, above all, it responds to the primary objective: creating new business and new jobs, notably for young people and women in Southern Regions.

1. A youth-oriented Southern Italy

Investing in human capital is a top priority for Southern Italy. The starting point must be the fight against the modern scandal of the perverse connection between economic poverty and child educational poverty, which affects almost 1.3 million children in absolute poverty, 500 thousand of whom in Italy’s Mezzogiorno (ISTAT, 2019a). This priority must be pursued within an overall programme aimed at improving the school and university offer to students in Southern Regions, strengthening the school’s role as personal emancipation engine, social aggregation space and active citizenship training place. Studies highlight some interruption, starting from the 2008 economic crisis, in the convergence process between the two microareas of the Country, and between Italy and the EU average, as to higher schooling and university participation rates. Data on Southern Regions reveal marked discrepancy between participation in secondary education and schooling rates: still too many southern children, although having access to high schools, do not complete their courses of studies, thus confirming significant and persistent school dropout rates. Regarding the most widespread phenomenon of early school leaving at international level (Early Leavers from Education and Training - ELETs), Southern Italy is still far from the target (10%). In recent years, the indicator has undergone a declining phase, which has however interrupted over the last two years. In 2018, ELETs were 18.8% in Southern Regions and 11.7% in Central-Northern Regions, respectively (ISTAT, 2019b). The quantitative gap adds up to a qualitative gap. International surveys converge in showing Italian students’ significant delay in knowledge and skills in real-life challenges (i.e., the ability to use knowledge and skills in specific contexts that characterise today's living conditions). Albeit their significant internal diversification, the PISA-OECD survey systematically ranks Southern Regions below the Italian average which, in turn, hovers around the twentieth position in the . The territorial economic-social context and the family cultural background weigh heavily on learning, up to fuelling the vicious circle of implicit early school leaving. These students, although completing their studies, do not even remotely attain the minimum skills required. According to latest INVALSI data (October 2019), in several Southern Regions the overall early school leaving rate (sum between the explicit and implicit early school leaving) is greater than 25%, reaching 31.9% in Campania, 33.1% in Calabria, 37% in Sicily, and 37.4% in Sardinia, respectively. These factors add up to the serious inadequacy of Southern school infrastructures also in terms of supply of labs and extra-didactic activities, which still requires prioritary investments.

15 Italy is the only EU major Member State significantly distant from Europe 2020 target on tertiary education: in 2018 only 27.7% of young people (25-34 years) had achieved tertiary education degree - almost 13 points below the 40% EU average, with , , and the already above the target (42.8%, 44.3%, 46.9%, and 48.1%, respectively). Territorial data confirm a persistent and growing gap between Southern Regions and the rest of the Country compared to the last decade, with the Centre-North standing at 31.6% and Southern Italy slightly over 20% (21.3%). Between 2002 and 2017 (most recent data available) Southern Italy lost more than 852,000 inhabitants (net migration balance), of which 612,000 young people (15-34 years old) and 240,000 graduates. Such massive outflows of human capital from the South to the North of Italy and abroad undermine the growth prospects of Southern regions and the turnover of its ruling class. In addition to the worrying general increase in the so-called “intellectual migration” from Southern Italy, another substantial outflow has involved a growing number of young people leaving Southern regions to go and study at universities based in Central-. This essentially moves up the decision to migrate from Southern Italy to the time when young people need to choose which universities to attend, in the aim of approaching those labour markets deemed to better absorb human capital with higher education. Therefore, investing in the right to study and access to universities based in Southern Italy is essential also to tackle the above phenomenon.

Box 4. The UN 2030 Agenda and the first mission of the 2030

Plan for Southern Italy

Within the first mission pursued by the 2030 Plan for Southern Italy, "A youth-oriented South", investing in school and training significantly contributes to attaining several targets linked to Goal 4 (Quality education), which requires States to: ensure that all girls and boys complete quality primary education leading to relevant and effective learning outcomes (4.1); ensure equal access for all women and men to affordable and quality technical, vocational and tertiary education, including university (4.3); increase, by 2030, the number of youth and adults who have relevant skills, including technical and vocational skills, for employment, decent jobs and entrepreneurship (4.4); and ensure that all youth achieve literacy and numeracy (4.6). At the same time, the first mission pursued by the 2030 Plan for Southern Italy enables impacting on the achievement of Goal 10 (Reduced inequalities), which requires that everyone's social, economic and political inclusion be empowered and promoted (10.2); and that equal opportunities be guaranteed to all, and inequalities of outcome be reduced (10.3).

2. A connected and inclusive Southern Italy

The competitiveness deficit of the whole Country is connected to deep inner competitiveness gaps linked to infrastructure. Italy's infrastructure is increasingly distant from EU average values ( data). In recent years, the progress accomplished in some areas has proved insufficient to respond to the growing demand for services. Such deficit is to be mainly ascribed to the

16 progressive decline in infrastructure investments in the Mezzogiorno region. From a southern perspective, the need for all-round infrastructure investments to bridge existing deficits appears by now evident, notably to improve access and connection to European TEN-T networks. Transport infrastructures and services to break isolation - An efficient infrastructure system proving adequate to the mobility needs of people and goods can enable developing current economic realities, and be a formidable attractor for new business initiatives to initiate economic convergence between the North and Southern Italy of Italy. Increasing and modernising networks is, however, not sufficient: it is necessary to concentrate resources so as to improve services and make them more accessible for citizens (the "High-Speed (AV) bonus" initiative is being studied, within the "iron bonus" logic, to guarantee trains with high-speed services even in non-served sections, in the perspective of the High-Speed Network). Three major priorities emerge from the analysis of infrastructural gaps, relevant for the whole Country and notably for its less developed areas: (i) Reducing the temporal distance between Italy's territories, by strengthening the railway network and speeding up services; (ii) Improving internal mobility in Southern Italy, notably Local Public Transport networks; (iii) Supporting territorial logistics chains, primarily inter-modal freight networks leaving and entering ports (the so-called "last mile", connecting ports to railway networks, logistics and inter- modality). In reconfirming the need to strengthen the large national infrastructure of the North-South connection system, it is a priority for effective cohesion policy to strengthen internal connections, through infrastructure investments on urban, peri-urban and medium-range mobility, promoting the development of agglomeration economies in most dynamic urban areas. The Mezzogiorno region, as suggested by the "Pendolaria 2019" Report (Legambiente, 2019), needs an "iron supplement treatment". However, actions aimed at modernising local and regional road transport fleet must also be promoted, favouring their conversion with sustainable and less impactful propulsion, and supporting medium-range connections between urban centres in Southern Italy, with road safety interventions, "smart roads” and diagnostics, as well as extraordinary maintenance interventions on secondary roads. Strengthening the development prospects of local business systems requires consistent investments. The SACE-SIMEST Report 2018 estimated the current logistic quality gap versus costs Italy 70 billion euro lost exports. Markets’ growing opening to southern productions, and southern logistics offer to the Mediterranean area are all opportunities the Mezzogiorno region should seize to gain and retain value within its economic system. To such end, efforts should focus on enhancing the supply chain and functional specialisation of some coastal sites, to enable Special Economic Zones (SEZs) to express their potential, build complementarity between the several logistical infrastructures in the Mezzogiorno region, and attain extensive and widespread development of “inner areas”. Social infrastructures to ensure full citizenship - Infrastructure priority needs in Southern Italy concern not only physical connection but also social inclusion. It is therefore necessary to invest primarily on

17 social infrastructures and services for promoting and guaranteeing social rights throughout the national territory. Widened territorial inequalities in terms of social indicators reflect heavily weakened welfare capacity to support the most disadvantaged segments of the population. Indicators on public service standards hint at widened North-South gaps in Italy (SVIMEZ, 2019a), overall as to socio-healthcare services, which strongly impact on the , and household incomes. Data on interregional hospital mobility provide the clearest picture of the shortcomings affecting Southern Italy’s hospital system (primarily in specific specialisation domains), and the length of waiting times for hospitalisation. The net balance of extra-regional hospitalisations from Southern Regions reached 114 thousand units in 2016, resulting in conspicuous transfer of resources from Southern Italy to Northern Italy. Social inclusion requires healthcare investments - namely, building new healthcare facilities and modernising the technological equipment of existing ones (e.g., diagnostics). At the same time, the services currently available in the Mezzogiorno region should be preserved and modernised, notably by strengthening socio-sanitary and social welfare services, within an integrated perspective. Provision of essential levels of benefits (i.e., Livelli Essenziali di Prestazioni - LEP) is not guaranteed in Southern Italy; this affects social stability in the region and poses the main constraint to the expansion of its production fabric. Still today, southern citizens are subject to an equal if not higher tax burden resulting from local surcharges; nevertheless, their fundamental rights are not guaranteed (or are, anyway, seriously deficient) in terms of local environment livability, safety, adequate standards of education, healthcare services, and care for adults and children. Such deficient services impact citizens’ lives and significantly influence economic growth prospects, as they play a non- accessory role in attracting and encouraging the settlement of entrepreneurial initiatives (SVIMEZ, 2019b). Guaranteeing citizenship rights (through identification of standard requirements and essential levels of benefits) is the main key to mobilising the massive human, environmental and cultural resources still unutilised, notably in Southern Italy. If adequately valued and capitalised upon, such key could contribute to recovery throughout Italy. Ordinary policies and cohesion policy are urged to reduce internal gaps in the quality of services provided to citizens. In this perspective, public policies are to be designed taking into account the potential contribution from the Third sector, still undersized in Southern Italy yet offering important instances (e.g., the network of experiences and activities that have arisen in recent years around the role of the Fondazione con il Sud). Third sector organisations help create a strong civil society and develop a sound economy, with more robust safeguards from erosion of rights and criminal infiltration. The social economy has significant growth potential and can prove an important driving force for Italy’s recovery. In recent years, overall during the crisis, the Italian Church proved a safeguard for social needs within several territories, notably in Southern Italy, often making up, in an innovative way, for the shortcomings of public action - e.g. initiatives such as the “Progetto Policoro” by the Italian Episcopal Conference (CEI - Conferenza Episcopale Italiana): through free training opportunities, the Project has enabled creating over seven hundred cooperatives: it is now a public interest to support and enhance its initiatives and outcomes.

18 In order to achieve the inclusion goal, institutional investors must be involved. In the European context, significant work has been carried out on social infrastructure, primarily through the High- Level Task Force on Investing in Social Infrastructure in Europe (HLTF), and the publication of the “Boosting Investment Report in Social Infrastructure in Europe” in January 2018 (Fransen, del Bufalo, Reviglio). According to the Report, resources equal to approximately 170 billion euros are spent annually on social infrastructure in the European Union; however, evolutions in the coming years (demographic changes, technological discontinuities) will require another 100-150 billion euro investment a year. The Report invites us to promote new models of action and financing to bridge this gap, mostly through a blend of public and private resources and by mobilising "patient" capital, to bring about strong acceleration in investments, primarily in more distressed territories.

Box 5. The UN 2030 Agenda and the second mission of the 2030 Plan for Southern Italy

The second mission pursued by the 2030 Plan for Southern Italy ("A connected and inclusive Southern Italy") is connected to Goal 9 (Industry, innovation and infrastructure), which

prescribes that quality, reliable, sustainable and resilient infrastructure be developed, including regional and transborder infrastructure, to support economic development and human well- being (9.1); and Goal 11 (Sustainable cities and communities), according to which signatory States shall: i) ensure access for all to adequate, safe and affordable housing and basic services, and upgrade slums (11.1); ii) provide access to safe, affordable, accessible and sustainable transport systems for all, improving road safety, notably by expanding public transport (11.2); iii) enhance inclusive and sustainable urbanisation (11.3); and eventually, iv) support positive economic, social and environmental links between urban, peri-urban and rural areas by strengthening national and regional development planning (11.a). However, investing in such infrastructure will also contribute to the achievement of other SDGs pursued by the UN 2030 Agenda. In particular, Goal 1 (No poverty), which requires implementing nationally appropriate social protection systems and measures for all, including floors, and by 2030 achieving substantial coverage of the poor and the vulnerable (1.3); Goal 3 (Good health and well-being), which prescribes that access to good-quality essential healthcare services be ensured to all (3.8); Goal 4 (Quality education), which requires ensuring that all girls and boys have access to quality early childhood development, care and pre-primary education so that they are ready for primary education (4.2), and building and upgrading education facilities that are child, disability and gender sensitive and provide safe, non-violent, inclusive and effective learning environments for all (4.a); Goal 5 (Gender equality), which requires recognising and valuing unpaid care and domestic work through the provision of public services, infrastructure and social protection policies (5.4), and ensuring women’s full and effective participation and equal opportunities (5.5); Goal 8 (Decent work and economic growth), which requires achieving full and productive employment and decent work for all women and men by 2030 (8.5), substantially reducing the proportion of youth not in employment, education or training (young NEETs) by 2020 (8.6); and, eventually Goal 10 (Reduced inequalities), as these measures are all aimed at empowering and promoting social inclusion (10.2).

19 3. A go-green Southern Italy

The challenge towards a greener and low-carbon Europe requires significant investment in energy, environmental and natural risk-mitigation projects. The prospect of the new European Commission as well as the decisions introduced by Italy’s 2020 Budget Law emphasise the construction of a Green Deal both for Europe and Italy. The prospect of a "just transition" thus acquires a strong territorial connotation both at European and national level. For Southern Italy, the new green path for economy and society can be an extraordinary opportunity, after decades, only to pursue the most advanced development processes and promote and experiment innovative ways of production and well-being. A green strategy can only start from the recognition of the key role played by agriculture and the entire agri-food chain, which are vital sectors of Southern Italy’s economy and society. The added value of Southern Italy’s agri-food sector, quantified at almost 19 billion euros, accounts for 31% of Italy’s total. There are more than 341 thousand active enterprises, and over 34 thousand in the food processing sector, almost half the number of enterprises involved at national level. As to employment, the agri-food sector, also considering the food industry, employs approximately 680 thousand people. Still, the sector reveals an unexpressed development potential, which must be supported by adequate investment, in view of strengthening supply chains and districts to boost innovation processes consistent with the Green Deal. Already today, in the absence of a consistent policy, the productive fabric of Southern Italy proves highly vital in the biotech sector. These enterprises are still not very substantial (out of the 641 active enterprises in 2018 at national level, 111 are based in Southern Italy), yet they prove strongly dynamic. Over the last decade, the number of biotech enterprises located in Southern Italy has grown at significant rates: +68.5% compared to 2008 versus +28.9% in Centre-North Italy (ENEA- Assobiotec, 2019). These data clearly show Southern Italy’s potential in a domain capable of combining the re-launch of production activity with the need to meet increasingly stringent environmental standards, across different production specialisations in the fields of human health, agriculture, zootechny, sustainable industrial processes and environment, as well as genomics, proteomics and enabling technologies (SVIMEZ, 2019a). Italy's position on the path of sustainable development depends on the potential that Southern Regions will be able to express, also in consideration of the estimated negative effects of climate change which would have the greatest impact on the Mezzogiorno area. The significant progress accomplished by the Country as a whole, and its Southern Regions in particular, in the use of renewable sources for electricity generation has strongly enhanced the energy efficiency level of public and private buildings. Commitment to transition to a low-carbon economy must guide a coherent investment policy, notably in Southern Italy, aiming to demonstrate that, within a mature knowledge-intensive economy, industrial activity and environmental quality do not conflict with each but must be pursued in a simultaneous and integrated manner. The future of plants such as former ILVA in Taranto, and more generally of the city, is linked to this challenge, which should underlie direct integrated projects and

20 interventions (see Box 9 "Cantiere Taranto” - an extraordinary plan for Taranto, below). A relevant example in this respect is 's Project for Gela, implementing interventions for development and re-launch of industrial activities in the area jointly with environmental rehabilitation and land reclamation actions4. On the one hand, circular economy initiatives by enterprises must be promoted and supported in light of the economic and social value they produce; on the other, it is important to ensure, also via public contribution, the offer of advanced services and healthy spaces that major added-value enterprises require. Public action in this field must consider that industrial investment in almost all territories does not take place in an unoccupied environment or however distant from other urban functions; and that it can provide an opportunity to redevelop abandoned industrial sites, reclaiming them and adapting them to productive forms being more compatible with residential, commercial or recreational functions, in the interest of overall quality of life. Data on the conditions of industrial development areas, intended to host enterprises, describe a reality in transition towards more modern forms of production that require investments in requalification of infrastructures and services. Based on the latest available survey (DPCoe-NUVAP), almost one third of suitable areas were not occupied and a significant portion of them (3.6%) had been dismissed in the Industrial Development Areas (IDAs) of Basilicata, Campania, Apulia and Sicily. The Green Deal for Southern Italy is the chance for a new major green infrastructuring project. Considering the general fragility of the national territory and its high-risk exposure to natural and/or man-made disasters, Italy will have to make significant efforts to develop a wide-ranging and coherent policy on seismic and hydrogeological risk mitigation in the coming years, to concentrate, in a complementary way, ordinary budget funds, contributions from private finance, and additional allocations from EU and national cohesion funds. This major requirement notably concern Southern Regions and the Apennine ridges, which require going beyond the emergency logic, prioritising the required actions over a multi-year horizon (also through the implementation of non- infrastructural interventions), concentrating resources on a limited number of homogeneous actions, innovative and consistent with emergency prevention and management. Persistent territorial gaps are identified in the main environmental market services, with modest experiences successfully integrating the new European paradigm of the circular economy. In the municipal waste management sector, although separate waste collection has increased in recent years, the percentage of waste sent to landfills remains very high in Southern Italy (40.2%, as per 2017 data, namely more than double the percentage recorded in Central-Northern Regions). The needs for greater investments concern waste production containment (also through reuse), maximisation of recycled materials, and accomplishment of the waste management cycle, favouring separate collection of waste and completion of the plant-related systems for correct treatment.

4 On 9 December 2019, Eni and the Ministry for Environment, Land and Sea Protection signed a Memorandum of Understanding on activities for decarbonisation, environmental mitigation, requalification and enhancement of industrial areas. These commitments complement the development project of Argo and Cassiopea gas fields, capable of achieving carbon neutrality thanks to the energy produced by photovoltaic systems. 21 Insufficient levels of service efficiency persist in the integrated water service, which result in remarkable network leaks and inadequate distribution of advanced purification treatments. Significant volumes of dissipated water negatively affect both the environment and integrated service users, causing waste of resources and higher management costs, with inevitable repercussions on tariffs. Support for infrastructure investments on water networks and purification proves crucial to improve the community’s well-being, while pursuing the sustainable objectives of a precious and increasingly scarce resource. The resulting improvement in service levels is to be measured on the drastic reduction of network leaks (also via new digital systems for remote monitoring on pipelines) and widespread dissemination of advanced treatments for wastewater treatment (e.g., phyto- purification technologies), to favour integrated cycle completion. Efficient and rational use of natural resources is not only indispensable to guarantee the environmental sustainability of development processes; it must also prove a potential competitive factor to be grasped by agri-forestry and agri-food enterprises, in terms of technological innovation, product enhancement and innovation, and creation of new value chains within new bio-economy and circular economy paths. In this sense, an ambitious plan to create more than 10,000 public and consortium medium-hill reservoirs can be an important axis of the Green Deal. Connected via an effective and widespread network, these plants can quench the thirst of our cities, ensure water supply to the countryside, preserve territorial habitats, and become an inexhaustible hydroelectric energy source at the service of sustainable development for the whole Country. In order to concretely address hydrogeological instability, it is necessary to intervene on forest surfaces which, with 11 million hectares (RAF 2019 data), now account for over 35% of the whole national territory (mainly in inner hilly and mountainous areas), promoting sustainable forest management also with a view to preventing and combating climate change.

Box 6. The UN 2030 Agenda and the third mission of the 2030 Plan for Southern Italy

The third mission, "A go-green Southern Italy", can help achieve the following SDGs: Goal 2 (Zero hunger), which requires ensuring sustainable food production systems and implementing resilient agricultural practices that increase productivity and production, and help maintain ecosystems and progressively improve land and soil quality (2.4); Goal 3 (Good health and well- being), reduce the number of deaths and illnesses from hazardous chemicals and air, water and soil pollution and contamination (3.9); Goal 4 (Quality education), ensure that all learners acquire

the knowledge and skills needed to promote sustainable development and sustainable lifestyles (4.7); Goal 6 (Clean water and sanitation), improve water quality, reduce pollution, halve the proportion of untreated waste water, and substantially increase recycling and safe reuse globally (6.3), substantially increase water-use efficiency (6.4), protect and restore water-related ecosystems, including mountains, forests, wetlands, rivers, aquifers and lakes (6.6); Goal 7 (Affordable and clean energy), increase the share of renewable energy (7.2) and double the global rate of improvement in energy efficiency (7.3); Goal 8 (Decent work and economic growth), improve global resource efficiency in consumption and production, and endeavour to decouple economic growth from environmental degradation (8.4); Goal 11 (Sustainable cities and communities), significantly reduce the number of deaths and the number of people affected by

22 disasters, including water-related disasters (11.5), reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management (11.6), and provide universal access to safe, inclusive and accessible green and public spaces (11.7); Goal 12 (Responsible consumption and production), in particular achieve the sustainable management and efficient use of natural resources (12.2), manage the waste cycle in a circular way (12.5), halve food waste (12.3), implement environmentally sound management of chemicals (12.4), and eventually promote public procurement practices that are sustainable (12.7); Goal 13 (Climate action), in particular strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries (13.1); Goal 14 (Life below water),

conserve and sustainably use the oceans, seas and marine resources for sustainable development; and eventually Goal 15 (Life on land),protect, restore and promote a sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, halt and reverse land

degradation, and halt biodiversity loss.

4. An innovation-frontier Southern Italy

In order to attract or retain trained human capital in the territory, quality job opportunities are primarily needed, generated by enterprises able to compete, grow and innovate. To such end, strengthening the networks between enterprise and research is of paramount importance, creating a modern and competitive technological transfer fabric to be encompassed in a sustainability- oriented paradigm of overall “manufacturing renaissance” in Southern Italy (Varaldo 2018). Based on the European Commission's Innovation Scoreboard (2019b), Italy is only eighteenth in the innovation ranking of EU Member States. Such disappointing performance results from several factors, such as: poor collaboration between innovation players; deficit in lifelong learning for human resources; still insufficient dissemination of digital technologies; persistently low public and private financial support for most innovative projects. In this context, gaps persist between Southern Italy and the rest of the Country, and between Italy and the rest of Europe, confirmed by modest total R&D expenditure versus GDP. In 2017, Italy's figure was 1.35%, with expenditure in Southern Italy lower than 4 tenths of a point, below the 2.06% EU average. Hence, we are far from the national target for 2020 (1.53%) and even farer from the Europe 2020 target of 3% (France: 2.19%, Germany: 3.02%). The Digital Economy and Society Index (DESI) developed by the European Commission ranks Italy only twenty-fourth in the EU, due to its extremely low percentage of regular Internet users (citizens). The divide related to public services supply is smaller, yet persisting, and the delay in terms of development of digital networks supplying families is even lower (European Commission, 2019c). Difficult access to non-banking R&I funding continues to affect Italy’s structural and cultural weaknesses. Based on OECD data, in 2017 the ratio between venture capital investments and GDP in Italy was 0.005% (versus 0.035% in Germany, 0.055% in France, 0.076% in the United Kingdom).

23 Only 9% of private equity and venture capital operations involved firms located in Southern Italy (10% in 2016); in terms of invested amounts, Southern Regions weighed only 1% (AIFI, 2018). Yet, the entrepreneurial fabric shows encouraging signs in terms of innovation, whereby public policies were able to follow mission-oriented approaches, as in the case of the Space Economy Strategic Plan, forerunning international trends. Italy is struggling with patents, yet it ranks significantly above the average as to dissemination of innovations in SMEs and is in line with European figures on defense of intellectual property rights in the field of “brands” and “design”. Data also confirm enterprises’ wide propensity to innovate, with a positive trend since 2010 notably in Southern Italy, supported by start-up promotion measures. On the other hand, data on the survival rate of enterprises are less encouraging, primarily in knowledge-intensive sectors. Product and/or process technological innovations prevail in more traditional production sectors, while more complex strategies (requiring significant and structured R&D for exploring or applying radically new solutions) are pursued by a small minority of enterprises, usually medium- or large-sized (Varaldo, 2018; Fondazione Ugo La Malfa, 2019). In less developed regions, innovation frequently underlies the purchase of new machinery and equipment; it is often the effect of an informal and discontinuous learning process, resulting from fixed capital modernisation choices. Positive signs are not lacking as to academic spin-offs, also in Southern Italy, despite the declining trend of public funding for universities. In recent years, some university centres developed innovation ecosystems, hosting large enterprises and startups and harmonising their academic programmes with digital transformation needs. This is the case of the university campus of San Giovanni a Teduccio (inter alia, assessed as ERDF best practice by the European Commission), and the Artificial Intelligence Centre of Cosenza. More than ten years after the 2009 L'Aquila earthquake, the Gran Sasso Science Institute has consolidated itself as a scientific excellence and international attraction centre, also thanks to relevant specialised skills in the same territory, including the National Institute of Nuclear Physics (INFN) laboratories. Such success stories prove it is possible to make policies for Southern Italy to attract innovative firms and talents for technology transfer. However, collaboration between enterprises and universities or research centres still does not fully express its potential for economic-productive development. Enterprises do not sufficiently make the most of the qualified human capital generated by the local educational system, starting from researchers. In sum, based on Italy’s economic re-launch prospects, the production system requires an ad-hoc technology-frontier oriented policy within overall redevelopment of Southern Italy’s entrepreneurial system through a new industrial policy (see V infra). The priority policy lines are: (i) Supporting the dissemination of innovation ecosystems, by promoting startups and attraction of new enterprises with qualifying impact on the economic, social and natural environment; (ii) Incentivising collaboration between enterprises and research system to encourage technology transfer, through public-private partnership.

24 Box 7. The UN 2030 Agenda and the fourth mission of the 2030 Plan for Southern Italy

The fourth mission pursued by the 2030 Plan for Southern Italy "An innovation-frontier Southern Italy" is aimed at attaining Goal 8 (Decent work and economic growth), achieve higher

levels of economic productivity through diversification, technological upgrading and innovation, including through a focus on high-value added and labour-intensive sectors (8.2); promote development -oriented policies that support entrepreneurship, creativity and innovation (8.3); and above all Goal 9 (Industry, innovation and infrastructure), which, prescribes: on the one hand, upgrading industries to make them sustainable, with increased resource-use efficiency and greater

adoption of clean and environmentally sound technologies and industrial processes, (9.4); and, on the other, enhancing scientific research, upgrading the technological capabilities of industrial sectors, encouraging innovation, and substantially increasing the number of R&D workers per 1 million people and public and private R&D spending (9.5). It is worth underlining that consistency with the UN 2030 Agenda demands, within this mission, that technology transfer be green-

oriented, to avoid affecting other sustainable development objectives negatively.

5. A Southern Italy open to the world in the Mediterranean

In recent years, exports by Southern enterprises have recorded slow yet steady growth (bringing the value of exported goods to approximately 50 billion euros), regaining pre-crisis levels. Nevertheless, to date Southern Italy’s economy is still not sufficiently internationalised. The value of exports on GDP is slightly higher than 10% (12.9% in 2018, against 31.7% in Central- Northern Regions), and still too few Southern enterprises can permanently access international markets, due to factors such as: enterprise sizing, management organisation, capital structure, digital skills, markets knowledge, and internationalisation skills. To fully seize such an opportunity, southern enterprises need accelerate their evolution towards more mature business forms, increasingly involved in Global Value Chains. This requires a sounder ability to stay on foreign markets and interact with international specialised operators, including through new technologies, making full use of the strategic positioning of Southern Italy. In this regard, restarting from the Mediterranean area is not a rhetorical option. It is the main chance for Italy’s export-devoted economy to impact on the new geographies of growth. The European Union has turned its back to the southern border for too long; and we are still paying the price of indifference. “Our sea” (mare nostrum) has become the “sea of others”, a place of competition and investment for great powers; or mare nullius, namely nobody's sea, long exposed to arbitrariness. Italy’s national interest lies in Mediterranean stability, which requires Europe to develop new awareness of its strategic role, dictated not only by economic dynamics, but above all by the historical stratification of cultural relations. Such strategic role should be re-launched with a view

25 to exchange between new generations, for widespread peace and well-being, also through dedicated cooperation programmes among universities. In this perspective, the Scuola Superiore Meridionale (Southern High School) in Naples would find one of its vocations. The key role currently played by the Mediterranean is above all connected to the maritime dimension of trade routes. Maritime trade is estimated to increase with an average annual growth rate of 3.8% between 2019 and 2023. The is a privileged route for container traffic, concentrating 27% of the world's scheduled services. The growth of goods in transit also confirms the central role played by the Suez Canal. Major geopolitical processes on infrastructure at global level, starting with the Belt and Road Initiative of the People's Republic of , increase competition intensity and at the same time create important investment opportunities for countries able to offer a modern and integrated network of port and retro-port infrastructures. From 2004 to date, Southern Mediterranean ports (North Africa and ) have almost bridged the competitive gap with Northern Mediterranean ports, which fell from 26 to 8 points, as per the UNCTAD Liner Shipping Connectivity Index (SRM, 2019). Therefore, over the next decade, Italian ports will face an increasingly competitive scenario - the average size of will continue to grow, generating risks and opportunities for the industry cycle, a strategic sector for Italy. In 2020-2030 the impact of SEZs will be measured alongside their ability to attract international investments (in collaboration with the Italian diplomatic network) and catalyse entrepreneurial investments, also thanks to bureaucratic simplification processes. Based on SRM estimates, when fully operational, these areas are to increase exports by up to overall +40%. Applying such growth performance to current southern export volumes, additional export of approximately 18 billion euros could be achieved over a decade. Historically Italian institutions have a positive agenda for the Mediterranean basin and Africa, also with reference to defense infrastructure and investments aimed at peacekeeping operations. Cohesion policy aims to contribute to this agenda, with a view to sustainability. The European Union, through the European Investment Bank (EIB), aims to mobilise 100 billion euros in the coming years on sectors such as employment, technology and climate in Africa. Such positive agenda requires new development cooperation drive through the European Territorial Cooperation (ECT), and investments in training and technology transfer for the southern Mediterranean shore.

26 Box 8. The UN 2030 Agenda and the fifth mission of the 2030 Plan for Southern Italy

The fifth mission pursued by the 2030 Plan for Southern Italy, "A Southern Italy open to the world in the Mediterranean", considering the Mediterranean Sea as the pivot of new relationships between Europe, Africa and Asia, intersects a very large number of cooperation-related goals (the Agenda sets out targets specifically intended for relationships with developing countries). Specifically, this mission will contribute to achieving Goal 9 (Industry, innovation and infrastructure), which requires developing regional and transborder infrastructures, to support economic development and human well-being (9.1); Goal 10 (Reduced inequalities), which prescribes facilitating orderly, safe, regular and responsible migration and mobility of people, including through the implementation of planned and well-managed migration policies (10.7); and Goal 17 (Partnerships for the goals), which requires improving North-South cooperation, to allow for access to finance, technological innovation, enhancing capacity-building, and increasing access to developing countries' markets.

27

IV. The first actions in 2020

In conjunction with the several administrations involved, the actions initiated or being activated in 2020 were identified consistently with the missions pursued by the 2030 Plan for Southern Italy. Some of the first few measures are already provided for by in the latest Budget Law and will be fully implemented over the year. These opening actions will rely on ordinary (capital) resources deriving from the application of the 34% clause, and development and cohesion plans (PSC) reprogrammed pursuant to Article 44 of Decree-Law No. 34/2019 (as amended by the 2020 Budget Law), which will be able to finance further coherent actions, based on the progress made by projects and their ready-implementation level. Eventually, some actions will benefit from the resources deriving from remodulation of National and Regional Operational Programmes (NOPs and ROPs). Whereby necessary in conjunction with the Ministry of Economy and Finance (MEF), the FSC will be able to ensure, in financing the action or intervention line, also the service provision start. In several cases, the actual offer of the service intercepts the demand that makes the investment cost sustainable over time.

1. A youth-oriented Southern Italy

1.1. Schools open all day Expected results - Encourage the opening of schools in the afternoon in Southern Regions, to give students the opportunity to bridge gaps in life skills. Strengthening the role of the school as a space for social inclusion and cultural sharing, to take young people from criminal influence in high-density mafia contexts.

Intervention lines - Pending the definition of a general public action, in order to spread "full time" opening in Southern schools while ensuring the essential levels of benefits (so-called LEP) and related services (canteens, staffs), the action aims to: expand the afternoon training offer by including extracurricular educational activities (cultural, social, artistic, and sporting) and legality culture workshops, increase the number of teachers and tutors, build up the necessary laboratories and/or modernise the existing equipment.

28 Implementation - The action will be activated as from the next academic year (2020-2021) in all Southern Regions, starting from schools located in the Municipalities where dropout rates are higher. The action will extend to all Southern Regions the best practices of "Open Schools" programmes activated in: Campania ("Scuola Viva" Programme, which finances afternoon workshops in extracurricular disciplines, encouraging networks between schools and local associations and enterprises); Apulia (“Diritti a Scuola” Programme, with afternoon lessons and psychological counselling, guidance, and cultural mediation); and Sardinia ("Tutti a Iscol@" Programme, with afternoon activities aimed at enhancing basic skills and lab activities). To implement the intervention, ACT will promote the establishment of a specific task force in charge of supporting schools and Municipalities, further developing the experience gained via the Task Force Edilizia Scolastica (School Building Task-Force).

Responsible entities - Ministry of Education, Territorial Cohesion Agency (ACT).

1.2. Countering educational poverty and early school leaving Expected results - Reduce educational poverty and early school leaving, primarily in areas penalised by remarkably serious socio-cultural exclusion, activating new training networks in the region, also involving the third sector, and promoting culture and legality in territories affected by strong mafia penetration.

Intervention lines - Consolidate and enhance the activities of the Fund to combat child poverty in the Mezzogiorno region. Supported by ACT and in collaboration with Foundations “of banking origin”, calls will be published for young people of different age groups and aimed at removing economic, social and cultural obstacles that prevent full use of educational processes by minors. In particular, the 2030 Plan for Southern Italy envisages activating new training and educational networks by local actors (private social parties, social services, court for minors, law enforcement, artisans, operators of production and services, parishes, youth and solidarity aggregation centres, sports centres, associations, and volunteers).

Implementation - In addition to the provisions introduced by the 2016 Stability Law, ACT will undersign ad- hoc protocols with banking Foundations, laying down the characteristics of the projects to be financed and the related methods for evaluation, selection (also with independent evaluators) and monitoring, in order to ensure transparency and best use of resources. The projects will be selected via public calls, also accessible to public-private partnerships consisting of a leader from the private social sector, the relevant Municipality, and one or more schools in the municipal area.

Responsible entities - Ministry of Education, Territorial Cohesion Agency (ACT), Foundations of banking origin.

1.3. Reducing skill-related territorial gaps Expected results - Reduce North-South gaps in relation to students' skills and their educational and training outcomes, thus contributing to reducing the so-called "implicit early school leaving".

Intervention lines - Interventions will focus on four fundamental areas: key competences; learning; variability of test results; so-called "school effect" (quality of students' skills net of factors that do not depend on school education). The interventions will, inter alia, encompass sharing of good practices between schools and teachers, as well as targeted care of teaching through coaching and support for teacher training on methodologies and didactic strategies.

29 Implementation - The action, coordinated by the Ministry of Education, in collaboration with regional school offices, territorial bodies and research entities, is primarily aimed at 520 schools located in Campania and Sicily which, based on INVALSI test results supplemented with other centrally collected data, experience particular operational problems. Subsequently, also through EU cohesion policy, the action could be extended to all the eight Regions of Southern Italy.

Responsible entity - Ministry of Education.

1.4. Strengthening the school building sector Expected results - Improve school buildings in Southern Italy, and specifically: substantial progress at project- design level; greater speed in securing schools and making them compliant with anti-seismic regulations; enhancing buildings energy efficiency; favouring schools’ access to regional and national resources aimed at the school building sector.

Intervention lines - Financing identified construction projects ready to be implemented. Assistance to schools in the project-designing stages, including from the Task Force Edilizia Scolastica promoted by ACT. Investments on schools connectivity in “inner areas”, and supply of hardware and machinery.

Implementation - The action provides for publication of ministerial notices for redevelopment project- designing, safety measures and adaptation to anti-seismic legislation of schools in Southern Regions, as well as construction of new schools and energy efficiency interventions.

Responsible entities - Ministry of Education, Territorial Cohesion Agency (ACT), Regions, Local Authorities.

1.5. Extending the No-Tax Area (without penalising universities) Expected results - Strengthen the right to study, significantly reducing the university access gap between Central-Northern Italy’s universities and Southern Italy’s universities, while contributing to the financial stability and operational capacity of southern universities.

Implementation - Revision, by the Ministry of University and Research, of the criteria for No-Tax Area access by southern universities, thanks to an extraordinary contribution that enables widening the tax exemption scope, enhancing the contribution provided so as to compensate for the lack of earnings, and avoid penalising the financial and operational capacity of universities.

Responsible entities - Ministry of University and Research.

1.6. Attracting researchers to Southern Italy Expected results - Attract a higher number of researchers to universities located in the eight Regions of Italy’s Mezzogiorno, improving the human capital of universities, research quality, and teaching services.

Intervention lines - Support contracting (fixed-term researcher contracts (36-month duration) for young PhDs currently operating outside less developed regions, with an educational qualification attained no more than eight years earlier and at least two years’ experience gained within other universities, research bodies or enterprises with operational headquarters abroad.

Implementation - The action is connected to Axis I "Investments in Human Capital" of “Research and Innovation 2014-2020” NOP, and related Directorial Decree No. 407 dated 27 February 2018 (chapter on

30 attraction interventions). The action will be implemented through a dedicated call for tender. The proposals put forward by universities must enclose an operational plan for attraction activities.

Responsible entities - Ministry of University and Research; southern universities.

2. A connected and inclusive Southern Italy

2.1. A more connected Southern Italy: infrastructure and services to break isolation

2.1.1. The “Piano Sud” by the Ministry of Infrastructure and Transport - Over 33 billion euros Expected results - Enhance and make southern infrastructures more efficient, promoting the construction and completion of works in the railway, road, water and construction sectors, thus contributing to: reducing the distance between Northern and Southern Italy; improving internal mobility between Southern Regions; supporting new and existing logistics chains.

Intervention lines - The action is spread over the eight Regions of Southern Italy, affecting several stages of infrastructuring, notably works under construction and to be tendered by 2021. The main interventions, in addition to the start of new works, concern scheduled maintenance, modernisation, adaptation, and safety.

As follows, the main works to be implemented:

- Ragusa- road connection (754 million euros); - SS 106 - Ionian (State road) - (megalot 3; 1,335 million euros; start of works: by March 2020); - SS 121 Catania (State road) - ( section A19, Bolognetta roundabout, 355 million euros; contracting: 2021); - SS 268 - Vesuvius (184 million euros; contracting: 2021); - SS 17 (State road) - Abruzzo and Appulo-Samnite Apennines (30 million euros; contracting: 2021); - SS 16 (State road) - Adriatic (BA26 variant; Bari-Mola di Bari section; 250 million euros; contracting: 2021); - Salerno-Avellino 02 Motorway junction (232 million euros; contracting: 2021); - Salerno-Reggio Calabria High Speed-High Capacity (“AV-AC”) line (3,030 million euros; initiated interventions: Battipaglia–Reggio Calabria section follow-up); - Naples-Bari High Speed-High Capacity (“AV-AC”) line (5,787 million euros; eight functional interventions, some of which already entrusted. The works eligible to be tendered by 2021 are: Hirpinia-Orsara section (pass tunnel): 1,535 million euros; tender published in April 2020, and award by 2020; Orsara-Bovino section: 560 million euros; tender published in March 2020, and award by 2020). - Messina-Catania line (doubling Giampilieri-Fiumefreddo; Cost: 2,300 million euros; Final project- design: completed; Tender for main works: scheduled for 2020).

Implementation - The above works included in the “Piano Sud” issued by the Ministry of Infrastructure and Transport (MIT) are already financed by so-called “programme contracts”: ANAS and RFI have undertaken

31 to entrust the works between 2020 and 2021, with the exception of the Ragusa-Catania road link -pursuant to Article 35 of Decree-Law No. 162 dated 30 December 2019, the following items will possibly soon be on the agenda of CIPE meetings: final project approval; replace the implementing body with ANAS; and identify available resources in the related “contract programme”. To speed up the Salerno-Reggio Calabria “AV-AC” (high-speed and high-capacity) railway line, new funding is expected for approximately 2,500 million euros, complementing the Salerno-Reggio Calabria institutional development contract (CIS) contribution. Total resources (under implementation and to be contracted by 2021) for infrastructure in Southern Italy amount to over 33.5 billion euros, broken down into 27.5 billion euros for railway infrastructure, 5 billion euros for road investments, 360 million euros for the water sector, and over 600 million euros for construction works, respectively. Planned infrastructures are instead equal to 54.8 billion euros, of which: 46 billion euros already financed.

Responsible entities - Ministry of Infrastructure and Transport (MIT), RFI, ANAS.

2.1.2. Secondary road network emergency Expected results - Improve the secondary road network of provinces and metropolitan cities in Southern Italy, through implementation procedures that impact on real needs and construction priorities selection.

Intervention lines - Finance extraordinary maintenance programmes for road networks of provinces and metropolitan cities in Southern Italy. Strengthen provincial contracting stations.

Implementation - With Italy’s 2020 Budget Law, the financing of extraordinary maintenance programmes for road networks of provinces and metropolitan cities has increased by 50 million euros for 2020, 100 million euros for 2021, and 250 million euros per year from 2022 to 2034. Accordingly, provinces and metropolitan cities will have to certify interventions completed by 31 October following the reference year, with subsequent reallocation of resources in the event of failure or partial construction. The aim is to enhance the national model for implementation of interventions on secondary roads in Southern Italy (also via additional resources, depending on needs), and project-designing and construction of works possibly excluded from the allocation.

Responsible entities - Provinces and Metropolitan Cities; Ministry of Infrastructure and Transport (MIT).

2.2. A more inclusive Southern Italy: social infrastructures to guarantee full citizenship

2.2.1. The Fund for Social Infrastructures for medium and small-sized municipalities Expected results - Increase social infrastructures in municipalities, in particular medium and small-sized ones; thus “give them oxygen" for investments aimed at reducing citizenship gaps.

Intervention lines - Financing social infrastructures based on municipalities’ social investment needs, with allocation of resources inversely proportional to the reference population.

Implementation - As per Italy’s 2020 Budget Law, the Municipalities in the eight Southern Regions are assigned a contribution of 75 million euros per year from 2020 to 2023, to be allocated to social infrastructure investments. Eligible interventions and terms and conditions for access to funding are defined via Decree of the President of the Council of Ministers to be issued by 31 March 2020, upon proposal by the Minister for

32 Southern Italy and Territorial Cohesion, in consultation with the Minister of Economy and Finance, having heard the “State-Cities-Local Entities Conference”.

Responsible entity - Territorial Cohesion Agency (ACT).

2.2.2. New day-care nurseries in Southern Italy Expected results - Increase and improve supply and quality of socio-educational and care services for early childhood, to strengthen the school learning path of children and enable female/male workers to attain work- private life reconciliation. Increase women’s active participation in Southern Italy’s labour market.

Intervention lines - Build, renovate and secure day-care nursery schools and kindergartens; support the supply increase through several forms of public-private and partnership; demand support through service vouchers; support for the so-called "spring sections".

Implementation - Reinforce the integrated planning action of social districts, also considering programmes and measures ongoing in some Regions. Preliminary analysis on the financing of additional intervention lines will be entrusted to the Department for Cohesion Policy, while the Territorial Cohesion Agency (ACT) will deal with coordination and technical support, also through an ad-hoc task force.

Responsible entities - Department for Cohesion Policy (DPCoe), Territorial Cohesion Agency (ACT).

2.2.3. Inclusion housing for vulnerable citizens and disadvantaged workers Expected results - Provide economic support and assistance to people who are in emergency housing situations in the eight Regions of Southern Italy. Contribute to achieving stable and dignified housing conditions, favouring full integration in the socio-economic fabric, also for foreign workers who are victims of the “caporalato” phenomenon (illegal hiring of workers subject to labour bosses).

Intervention lines - Funds aimed at supporting: home owners and tenants who struggle to pay own mortgage installments or rental fees; individuals addressed by eviction orders for so-called "innocent arrears"; people belonging to disadvantaged/vulnerable categories looking for houses to rent (including seasonal workers); owners and tenants of houses requiring urgent hygiene-sanitation and energy requalification interventions.

Implementation - Establish a special guarantee fund with FSC resources. The Fund will be the subject of an agreement with the national Authority for microcredit (Ente Nazionale Microcredito), which will draw upon existing agreements with banking institutions for provision of social microcredit aimed at promoting inclusion housing. The credit will amount to max. 10,000 euros, without requiring real guarantees (collateral). Pursuant to Article 111(3) of Italy’s Consolidated Banking Act (Testo Unico Bancario - TUB), family budget services will be guaranteed to beneficiaries. Furthermore, additional assistance services will be provided for guidance to beneficiaries, as well as services that encourage supply-demand matching for housing solutions.

Responsible entities - Department for Cohesion Policy (DPCoe); Ente Nazionale Microcredito.

2.2.4. “Case della Salute”: Healthcare Homes for integrated assistance Expected results - Improve healthcare in most distressed regions of Southern Italy by creating the “Case della Salute”, i.e. healthcare homes that integrate public socio-sanitary care. The intervention is aimed at

33 guaranteeing a range of more effectively usable services (notably for the elderly) and dealing with chronic diseases. The integration with the existing healthcare network will also reduce improper access to First Aid, unnecessary hospitalisations, waiting lists, and so forth.

Intervention lines - Offer new healthcare and socio-sanitary services by creating, within healthcare homes: a nursing clinic service, General Practice reorganisation, strengthened services for mental healthcare and fight against addictions, clinics for integrated management of main chronic diseases, and multifunctional spaces to host healthcare and prevention promotion actions aimed at general public and specific segments of the population.

Implementation - Each Local Health Authority (ASL) will identify the areas and buildings in which the "Casa della Salute" is to be built, based upon a project-design complemented with an ad-hoc management plan. Action will subsequently be taken to project-design and implement the required interventions to activate the healthcare homes within three years.

Responsible entities - Ministry of Health, Aziende Sanitarie Locali (ASL).

2.2.5. Renovating healthcare technological equipment Expected results - Renovate technological equipment of hospitals and healthcare facilities in Southern Italy, to reduce costs and improve the quality of healthcare services, reducing the gaps between Southern and Central- Northern Regions and contributing to progressive alignment of essential levels of assistance (Livelli Essenziali di Assistenza - LEA). Reduce hospital mobility from Southern Regions. Preserve essential hospital and healthcare facilities in disadvantaged areas, ensuring quality of services.

Intervention lines - Renovate obsolete diagnostic machinery; develop and implement Smart System Integration, support assistive and rehabilitative robotics, home automation and Home Building Automation, e-Health & e- Care. The technological adaptation interventions in the first implementation phase concern, in particular, PET/CAT-scan and MRI , mammography and angiography equipment, surgical , gamma cameras.

Implementation - Needs in the eight Regions of Southern Italy identified by the Ministry of Health; systematic and progressive replacement of technological equipment.

Responsible entities - Ministry of Health, Regions.

3. A Go-Green Southern Italy

3.1. "Energy income" for families Expected results - Enhance dissemination of renewable energies, through increase in distributed generation and small-scale plants aimed at self-consumption, with resulting decrease in the emissions related to energy production of domestic utilities, while reducing "energy poverty" of low-income segments of southern population through savings on utility bills.

Intervention lines - Establish a national fund for purchase of photovoltaic systems. The revolving fund is broken down into two sections: the first relates to capital grants, namely direct incentives for purchase of photovoltaic

34 systems; the second provides guarantees for bank loans for purchase of plants. The savings on utility bills are obtained through self-consumption of power generated by the photovoltaic system.

Implementation - The implementation tool consists in reformulating the 2014-2020 FSC-funded NOP “Imprese e Competitività” (Enterprises and Competitiveness), under the responsibility of the Ministry of Economic Development (MiSE). A MiSE decree will define the operating procedures and specify requirements for beneficiaries. The decree will also specify the involvement of the energy service managing authority (Gestore dei Servizi Energetici - GSE) in the adaptation and evolution of the “Scambio sul Posto” (SSP) (literally “on-the- spot switch”) mechanism (compensation of power generated and fed into the network at a certain moment with the power taken and consumed at a moment different from generation time), in order to replenish the revolving fund, or return the bank financing quota in the case of State guarantee.

Responsible entities - Presidency of the Council of Ministers, Ministry of Economic Development (MiSE), Gestore dei Servizi Energetici - GSE.

3.2. Circular economy experimentation Expected results - Promote Italy’s positioning in the segment of recycling and reuse of absorbent hygiene products, while contributing to reduction of emissions. The action is consistent with "Towards a Model of Circular Economy for Italy" (2017) Guidelines: disassembling, recycling, reuse, collection, and regeneration.

Intervention lines - Create an Italian technology network for complete recycling of personal hygiene products, through the following steps: place smart bins in pilot cities in Southern Italy, digitally accessible devices for separate collection with 100% sustainable power supply; transfer collection operations to treatment plants; place "secondary raw materials" on the market.

Implementation - The Ministry for the Environment, Land and Sea Protection will adopt a guidance act on the initiative; Regions will be responsible for issuing authorisations related to waste treatment plants; Municipalities will take care of organisation and assignment of the separate collection system for hygiene products.

Responsible entities - Ministry for Environment, Land and Sea Protection; Regions; Municipalities.

3.3. Strengthening sustainable transport Expected results - Improve sustainable public transport service in Southern Regions, in particular regional and interregional rail transport, metropolitan and suburban transport, and connections with “inner areas”. Improve service conditions for commuters, starting from reduced travel times. Reduce traffic congestion, enhance use of public transport, and increase travel on low-impact . Among the expected results, significant reduction of CO2 emissions.

Intervention lines - Purchase new rolling stock, electrify some lines serviced by locomotives, buy new wagons for subways and suburban trains, improve the conditions of urban railway stations; provide specific technical assistance to Southern Regions and Municipalities to draw up Sustainable Urban Mobility Plans (SUMPs); renovate road rolling stock with new buses with lower environmental impact, notably within “inner areas”.

Implementation - The Ministry of Infrastructure and Transport will allocate resources to Regions, Municipalities, Metropolitan Cities that will award/entrust works for implementing the intervention lines (public calls for tender; negotiated procedures).

35 Responsible entities - Ministry of Infrastructure and Transport, ACT, Regions, Municipalities, Metropolitan Cities.

3.4. Supply chain and district contracts in the agri-food sector Expected results - Enhance competitiveness and sustainability of agricultural and agri-food enterprises. Strengthen the relationship between primary production and processing in Southern Regions with strong agricultural vocation.

Intervention lines - Tangible and intangible investments in farms, connected to agricultural production, and related processing and marketing. Investments in agricultural products processing into non-agricultural products. R&D projects in the agricultural sector.

Implementation - Allocation of new resources to incentivise “supply-chain and district contracts” in Southern Italy. Responsible entity - Ministry of Agricultural, Food and Forestry Policies.

3.5. Sustainable forest management Expected results - Increase sustainability of forest management, to respond to environmental, economic and social needs, primarily within “inner areas”. Hydrogeological instability prevention through forest maintenance. Stimulate "wood-energy" supply chains.

Intervention lines - Support associations for forest management throughout the territory: forestry consortia, agricultural universities, cooperatives and/or other typically local associative forms. Extraordinary maintenance of forest and mountain territories and hydrogeological reorganisation.

Implementation - Financial support, via FSC reprogramming resources, for ordinary allocation of rural development programmes to increase sustainable forest management.

Responsible entities - Ministry of Agricultural, Food and Forestry Policies; Forestry Consortia, Agricultural Universities, Cooperatives and other relevant Bodies.

Box 9. “Cantiere Taranto” – an extraordinary plan for Taranto

Taranto and its surrounding territory reveal all the main emergencies affecting Southern Regions: i) production emergency - the now thirty-year crisis of former ILVA steel plant and its subcontracting industries is just the tip of the iceberg; ii) environmental emergency - which requires repairing past damage while rethinking the production model and safeguarding health, employment and development; and iii) social and demographic emergency - the city has lost almost fifty thousand inhabitants since the 1970s. The so-called “Cantiere Taranto” - an extraordinary plan for Taranto, is at the centre of the

attention of politics and institutions. Numerous tools and projects have been devised in recent years; it is now necessary to quickly execute the implementation phase: recovering, also through central institutions’ renewed role, Taranto’s ability to change while avoiding the mistakes made by previous generations; and starting a green and sustainable social and productive revolution.

36 The absolute priority lies in providing a definitive solution to the crisis of former ILVA steel plant. Taranto and Italy as a whole cannot give up the challenge of freeing the city from a dramatic blackmail - i.e., imposing a choice between either development or public health. If it is true that

green and the whole South is not a “lost cause”, the re-launch of former ILVA with a view to sustainable development is the battle to be now fought and won. With this in mind, it is firstly necessary to complete the dialogue set up with EU institutions on the use of European funds for environmental and industrial conversion purposes. The reference is primarily the Just Transition Fund - its use, to be extended to the steel sector, provides a historic and probably unrepeatable opportunity. Furthermore, it is then necessary to resume the "interrupted talks" on Taranto CIS

(institutional development contract), which outlines the key (urban, cultural and productive)

features of Taranto’s future: more than one billion euro interventions already financed, and very largely yet to be built in the city and its province, with approximately 550 million euros from the FSC (Development and Cohesion Fund). The Decree issued by the President of the Council of Ministers (DPCM) strengthens the powers conferred to the so-called “Responsabile Unico” (Sole Manager) of Taranto development contract, in order to ensure, jointly with Invitalia (implementing body), the necessary coordination with local/central institutions and socio-economic operators engaged in the implementation of interventions. A valid support to guarantee best coordination of interventions can be provided by the Government-designated Extraordinary Commissioner assigned to the newly established Ionian Special Economic Zone (ZES Jonica) and his Office, appointed as per Italy’s 2020 Budget Law. Within a broader decree-law for Taranto, further cohesion resources will be used, inter alia, for the following interventions: - 55-million-euro financing (FSC resources) of Taranto’s Free Urban Zone (Zona Franca Urbana - ZFU). The aim is to guarantee significant tax incentives for professionals and small and medium-sized enterprises (whether new or already operating in Taranto) most distressed by the current socio-economic crisis affecting the territory; - Within Taranto SEZ, completing the so-called "last mile" infrastructure - i.e., substantial (bureaucratic and financial) acceleration, at regulatory level, of SEZ infrastructure interventions with approximately 60% implementation progress to date; - Within Taranto SEZ, constructing "green" infrastructures aimed at and non-motorised "soft" mobility (greenways) along dismissed railway lines.

4. An innovation-frontier Southern Italy

4.1. R&D Tax Credit in Southern Italy Expected results - Increase R&D investments in southern enterprises, to bridge the substantial gap between the use of tax benefits in Centre-North Italy and Southern Italy, respectively (MISE data: the use of "Impresa 4.0" measures previously in force is broken down between the two macro-areas in a 70-to-30 ratio), thus strengthen qualified employment, industrial endowment, and technological development in the Mezzogiorno region.

37 Intervention lines - The scope of application concerns tax incentive measures (tax credit) relating to essential and industrial research, and experimental scientific-technological development. In particular, the tax credit measures apply to costs/expenses borne for: hiring permanent and fixed-term researchers, with an increase for junior researchers upon first contract; purchase or rental of goods, supplies and software, also to construct prototypes and pilot plants; patents and services; research contracts, with an increase for those assigned to universities or public research institutions.

Implementation - The new 4.0 industrial policy on RDI ("Transition Plan 4.0") introduced by the 2020 Budget Law will be complemented with enhanced incentives for R&D investments in the eight Regions of Italy’s Mezzogiorno. The aim is to raise the tax credit measure to an aid intensity equal to 100% of the costs for essential research, 50% for industrial research, and 25% for experimental development (further increases for SMEs).

Responsible entity - Ministry of Economic Development (MiSE).

4.2. Enhancing ITS in Southern Italy Expected results - Bring the training offer closer to labour needs in the Mezzogiorno region, enhancing students’ technical-professional skills for future jobs, overall digital transformation and sustainability.

Intervention lines - The action provides for investment on technical vocational training institutes (Istituti Tecnici Superiori - ITS) in two domains: on the one hand, increase resources allocated to ITS; on the other hand, improve ITS performance consistently with inputs from Indire annual report, contributing to ensuring technical-professional specialisation that is more functional to local production needs.

Implementation - The Indire monitoring report enabled identifying five southern ITS with negative evaluation over the last three years. Those five ITS will receive assistance from the ITS assessed as best performing by Indire, within the same technological area and educational sphere. At the same time, the whole ITS system will be enhanced to encourage digital transformation and sustainability; in particular, an action plan will be activated on reorganisation, optimisation of resources, and network strengthening.

Responsible entity - Ministry of Education.

4.3. Strengthening the "Fund of Funds" Expected results - Increase R&D investment by enterprises (Large Enterprises, MidCap, SMEs) in Southern Regions.

Intervention lines - Fund industrial research, experimental development and Key Enabling Technologies (KETs) for the thematic areas of the National Smart Specialisation Strategy. Reinforce additionality features of subsidised investments and adapt criteria for selection of investments (also as to risk profile), in line with development and cohesion purposes.

Implementation - Increase the financial endowment of the "Fund of Funds" created by the then MIUR and managed by the EIB under the National Operational Programme (NOP) “Research and Innovation 2014- 2020”. Through the "Fund of Funds", the EIB selects the financial operators that support R&I innovation projects, providing enterprises with loans, equity and quasi-equity instruments, or equivalent.

Responsible entities - Ministry of University and Research (MIUR), European Investment Bank (EIB).

38 4.4. Space Economy in Southern Italy Expected results - Enhance skills in Southern Italy, by strengthening the space supply chain and national industry capacity, in continuity with the Space Economy Plan.

Intervention lines - As follows, the programme for the entire value chain, starting from research, development and construction of enabling space infrastructures (upstream), up to the generation of "enabled" innovative products and services (downstream): telecommunications, navigation and positioning services, environmental monitoring, etc.). Major boost will be provided to technology transfer and financial instruments for acceleration of start-ups in the Mezzogiorno region.

Implementation - The action envisages a specific line relating to Southern Italy in the new Space Economy Plan 2020, subject to approval by the inter-ministerial committee for aerospace and space policies.

Responsible entity - Inter-ministerial committee for aerospace and space policies.

4.5. Technological startups in Southern Italy Expected results - Assist SMEs and technological startups in Southern Italy for their growth and promotion in international markets.

Intervention lines - Support for technology and digital enterprises in Southern Italy to comply with the "MadeIT" brand being created. The brand will support technology enterprises through mutual collaboration programmes and with Italian and foreign business incubators and accelerators. "MadeIT" will also encourage introduction of a simplified visa system, to allow for easier movement of workers in the ITC sector.

Implementation - Cohesion policy resources may be allocated for enterprises in Southern Regions to join the "MadeIT" brand, complementing the activity of the Department for Digital Transformation, which will also see to aggregating existing support measures to innovative technology.

Responsible entity - Department for Digital Transformation.

5. A Southern Italy open to the world in the Mediterranean

5.1. Enhancing Special Economic Zones (SEZs) Expected results - Attract foreign direct investments, strengthen exports and improve the infrastructure of Southern logistics hubs, through full operation of Special Economic Zones (SEZs). Intervention lines - Adaptation and strengthening of road and railway axes connecting with industrial areas, ports, interports and retro-ports, also constructing "last mile" infrastructures. Upgrading/Adjusting ports, landings and ground services for freight traffic development. Developing "Energy Protocols" to reduce energy costs for enterprises operating within SEZs. Enhancing enterprises’ competitiveness, both directly, through financial support, and indirectly, through actions aimed at strengthening tangible and intangible infrastructures. Legality safeguard in SEZs also through specific technological equipment.

39 Implementation - In line with the Strategic Development Plans of each SEZ, the action will promote attraction of investments via a defined "package" of SEZ-related incentives which can be proposed to investors by the Government-appointed Commissioner. Responsible entities - Extraordinary Commissioners of SEZs, Ministry of Infrastructure and Transport (infrastructural interventions), Ministry of the Interior (legality safeguards), ACT.

Box 10. Actions and interventions for special economic zones

Special Economic Zones (SEZs), established in Italy with the so-called “Decreto Mezzogiorno” (“Mezzogiorno Decree”) dated 2017, are an instrument successfully applied in numerous port and retro-port areas worldwide, based on two essential pillars: 1) Enhanced tax credit for investments in tangible assets within SEZs, compared to the measure in force in Southern Regions (maximum coverage per investment project is 50

million euros in SEZs, against a maximum coverage of 15 million euros in the rest of Southern Italy). Furthermore, the development plan of each SEZ may include additional tax incentives at local level; 2) Significant administrative simplification measures, both at central legislative level and regional level, with creation of the administrative one-stop shop (a.k.a. Sportello Unico Amministrativo (SUA) based within Port System Authorities.

The 2020 Budget Law has significantly further strengthened the measure, with the aim of speeding up the implementation and operation of the instrument, thus recovering its function for large investment attraction.

At governance level, a Government-appointed Extraordinary Commissioner is designated for each SEZ, who chairs the relevant steering committees and takes part in the national governing body (“Cabina di Regia”), to guarantee both the necessary unitary direction for investment

attraction policies and a decisive boost for effective implementation of the measures envisaged

in single SEZ-related development plans, at the level of administrative simplification, marketing and attraction of investments. In terms of tax incentives, the tax credit on investments will be extended to end-2022, with an additional 100-million-euro coverage.

Furthermore, the 2020 Budget Law entitles Simplified Logistics Zones (Zone Logistiche Semplificate - ZLS) connected to important port facilities located in Italy’s Centre-North to establish “enhanced” Simplified Logistics Zones within the areas eligible for regional State Aid, thus extending the tax incentive as per SEZ model. So-called "enhanced" Simplified Logistics Zones would therefore be substantially equivalent to SEZs in terms of tax incentives and administrative benefits.

In particular, the additional lines of intervention (specific funding throughout 2021-2027) provide for:

I. Appointing the Extraordinary Commissioners and establishing their Offices, to support the activities performed by Commissioners and the Steering Committee of each SEZ; II. Financing the so-called "last mile" infrastructures within SEZs, with adaptation and strengthening of road and railway axes connecting with industrial areas, ports, interports

and retro-ports, for necessary development of freight traffic; III. Developing "Energy Protocols" to reduce energy costs for enterprises operating within SEZs;

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IV. Developing synergy with the Agenzia delle Entrate (Italy’s Inland Revenue Agency), for optimised application of tax incentives (especially logistics) and coordination of the

several tax measures at local and national level; V. Entrusting the Port System Authorities falling within SEZs to establish Customs Free Zones, to enhance their investment attraction potential; VI. Establishing the SEZ legality safeguards provided for by legislation and regulations, also through ad-hoc technological equipment.

5.2. The Export Plan for Southern Italy Expected results - Transform southern enterprises that can potentially export into habitual exporters and increase the share of southern exports on the national total. According to sample surveys conducted by ICE on the first year (2017-2018) of “Piano Export Sud II” (Export Plan for Southern Italy II), 61% of participating enterprises recorded an average 12.6% increase in their turnover.

Intervention lines - Re-finance the Export Plan for Southern Italy also in the 2021-2027 programming cycle, within the “PON Imprese e Competitività” 2014-2020. The South Export Plan envisages training initiatives, strengthening internationalisation skills, and promotion initiatives (participation in fairs and productive partnership events, organisation of foreign operators’ incoming missions) for the benefit of SMEs located in the eight Regions in Southern Italy.

Implementation - Also within the new cycle, the Export Plan for Southern Italy will be managed by ICE-Agency and implemented in coordination with Regions, and in collaboration with entrepreneurship representatives from the territories concerned.

Responsible entities - ICE-Agency, Ministry of Foreign Affairs and International Cooperation, Ministry of Economic Development, Regions.

5.3. Supporting the port system Expected results - Enhance competitiveness and commercial-tourist attractiveness of ports located in Southern Italy.

Intervention lines - Restructuring, modernising, securing and developing port and retro-port areas, both in terms of maritime accessibility and connection to land transport lines (e.g. last-mile railways).

Implementation - Application of the 34% clause in all subsequent decrees for distribution of resources from the Fund aimed at central administrations investments, reserved for strengthening the Italian port system in the next 15 years, to bring 306-million-euro investments to southern ports. Implementation of investments in the port system of Southern Italy as per 2020 Budget Law (starting from 6 million euros for Gioia Tauro retro- port).

Responsible entities - Ministry of Infrastructure and Transport; Port Authorities.

41 5.4. Defense for Southern Italy as a border and bridge in the Mediterranean Expected results - Create employment opportunities and improve the existing defense infrastructures to meet new operational needs, with a view to sustainable development.

Intervention lines - Rehabilitating and securing (compliance) the two maritime military arsenals in the Mezzogiorno region (Augusta and Taranto). Dredging operations within military ports. Energy efficiency programmes in military barracks. Radar modernisation.

Implementation - Infrastructural recovery and adjustment of Taranto’s maritime military arsenal is provided for by the relevant institutional development contract (CIS Taranto). The other interventions will be included in dedicated plans implemented by the Ministry of Defense.

Responsible entity - Ministry of Defense.

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V. Structural policies and urgent measures for employment and enterprise

We cannot conceive re-launching Southern Italy without industry. Development and cohesion policy must aim, above all in the Mezzogiorno area, at: supporting entrepreneurial activities, whereby present, improving their competitiveness by enhancing their relationship with the environment and knowledge institutions; and, at the same time, encouraging the creation and settlement of new enterprises. The need for "an industrial policy for the 21st century", oriented towards innovation and contemporary challenges, is by now the subject of a wide range of international literature (Rodrik 2004; Rodrik 2014; Aiginger, Rodrik 2020). At the same time, the future of industry cannot be scheduled if current emergencies are not duly addressed. Industrial crisis tables are the clearest expression of difficulties affecting the national economic context and their repercussions on the Mezzogiorno region. Of the 149 discussion tables at the Ministry of Economic Development (MiSE), 43 concern firms with offices and production units mainly located in the Mezzogiorno area, which are also addressed by 25 national tables (MiSE data, November 2019). Re-launching Southern Italy’s development requires incisive actions on crises and rehabilitation, also through simplification and acceleration tools provided for by Decree-Law No. 34/2019 (so-called “Decreto Crescita”, i.e., Growth Decree), strengthening the central coordination at the Ministry of Economic Development (as per Decree-Law No. 101/2019 (so-called “decreto crisi aziendali”; i.e., corporate crisis decree). On the other hand, in recent years some southern Italian enterprises, prevalently medium-sized, have gone through the long recession demonstrating their ability to innovate and compete on international markets. These elements can enable us to rebuild the Mezzogiorno region - where the crisis heavily hit the local SME system, but a significant number of enterprises have survived, capable of facing competitive challenges at the best. Confindustria-Cerved data (2019) show that, although approximately 10% of industrial SMEs (10-250 employees) active in 2007 is still missing, slow repopulation is ongoing especially in Campania and Apulia, to date the two best-performing manufacturing Regions in Southern Italy.

43 The southern Italian productive system, which partially proved to be significantly "resilient", has managed to join the national and international recovery process, as shown by positive export trends in recent years. Nevertheless, the sizing of several firms and production lines still proves insufficient. The economic structure of Southern Italy is marked by an excessively high number of workers employed in small and micro enterprises. Furthermore, in the absence of adequate expansionary policies, risks still exist that the local production fabric may not ensure, due to its small size, accelerating or even continuing its growth process, as recently occurred. It is essential to start from “what works”. Strengthening the district model remains important for productivity, export increase, and innovative processes, for instance in Apulian mechatronics and food chains ( “Monitor dei Distretti”, various annual reports). Institutional policies on "vital industrial areas", launched by Territorial Cohesion in 2012, also focus on: electronics in Abruzzo; aerospace districts in Campania and Apulia; ICT firms in Sardinia; and electronics in Sicily (Cersosimo and Viesti 2013). The levers to strengthen these models and spread excellence within a wider growth ecosystem require action on dimensional growth, increase in tangible and intangible investments, and productive dialogue with universities and research centres (Ibid.; Intesa Sanpaolo 2019). Strengthening existing assets, opening internationally, enhancing managerial skills and workforce, and effectively managing the difficult generational transition are essential actions for the required maturation process (also cultural) of micro, small and medium-sized enterprises. The Italian context is marked, on one side, by the disappointing performance of the private R&D system in the field of "knowledge socialisation" (Ciocca 2015), and, on the other, by the increasingly recognised role of listed publicly-owned large enterprises as driving forces of innovation, and as more efficient governance experiences compared to large infrastructure and TLC firms that underwent the end of State’s contribution (Pagano 2019). At the same time, the Great Recession highlighted the international, European and national role played by public development banks; they pursue public interests by performing market activities, and are key elements of EU strategic plans (as happened for the European Investment Bank in the Investment Plan for Europe ("Juncker Plan") and will occur in the InvestEU Programme (2021-2027). Latest data on State Aid to enterprises (2017 update) published by the European Commission (2019d) show Italy is the “tail light” of EU Member States: State Aid is 0.27% of GDP in Italy, against 1.29% in Germany, well below France (0.73%, in line with the EU-28 average of 0.72%) and even the United Kingdom (0.37%). To date, enterprises’ vitality has not been supported with consistent safeguard by the State and the enlarged public sector: hence, a coherent industrial policy oriented towards challenges and missions is now needed. It is essential to boost investments throughout the life cycle of Southern Italy’s enterprises (venture capital and technology transfer) primarily by ensuring full operation of FSC resources in the National Innovation Fund. A crucial overall role must be played by Cassa Depositi e Prestiti (CDP) Group, trusted by southern families, as the share of postal deposits in Southern Italy is significantly higher than the southern share on the overall Italian population. Nonetheless, over the previous decade, no South-based enterprise received investments from the Italian Strategic Fund (now CDP Equity), and only 5.6% of the investments of the Italian Investment Fund were addressed to Southern Regions (data at Sept. 2019). Therefore, implementing the 2030 Plan for Southern Italy will soon require relying on the essential collaboration set up with CDP on enterprises and

44 infrastructures in Southern Italy, to be measured in increase and acceleration of investments, and support to administrations on financial instruments. At the same time, a similar training and information investment will be needed within Southern Italy’s enterprises, to improve communication channels with financial institutions, renew corporate culture and thus encourage innovation and digital transformation of SMEs. Southern Italy’s enterprises - overall, SMEs - are more dependent on bank credit. Poor access to finance also resulted from EU transposition of the Basel Accords on capital adequacy requirements for financial intermediaries (Financial Stability Board, 2019). Banking crises usually have a stronger impact on Southern Italy’s entrepreneurial fabric. In this context, the Government took action to strengthen the Mediocredito Centrale - Banca del Mezzogiorno, to stabilise Southern Italy’s credit system also in view of subsequent banking aggregations that will better support southern enterprises. Interventions will also focus on value chains, which will become increasingly relevant over the decade: internationally, it is a question of strengthening Italy's position within strategic value chains for the European economy; in a national perspective, it is necessary to fully map the suppliers of large manufacturing enterprises, with a view to promoting their dimensional growth, starting from those operating in highly innovative sectors and most involved by the next transformation waves. Promoting this industrial policy for dimensional growth requires acting on capitalisation and access- to-credit levers, innovation in corporate organisation, process and product, and favouring the inclusion of high-quality human capital. The main publicly-owned enterprises have already undertaken some actions in this direction5. The 2030 Plan for Southern Italy aims to support and complement these processes, with special focus on the relationship with research and technology transfer, through task forces in charge of providing assistance throughout the implementation process of the Plan. In particular, the “Cresci al Sud” (literally “Grow in Southern Italy”) Fund and the use of new financial instruments for investments and innovation (thanks to a greater role played by Invitalia and Banca del Mezzogiorno in scouting enterprises and supporting value chains), can help consolidate the relationship between sub- suppliers and large industry in a decisive way, thus promoting the inclusion of Southern Italy’s SMEs in networks and promoting the development of new "champions" of Southern Italy’s industry. A success story is the experience of the 156 “development contracts”, financed as from 2011 on the whole territory but mainly concentrated in Southern Regions, where they granted over 2-billion-euro benefits and promoted approximately 4-billion-euro total investments (Invitalia data). It is therefore advisable to go on endowing “development contracts” with adequate resources to promptly respond to southern enterprises’ growing needs. The Green Deal hints at a transversal horizon to plan and implement a modern industrial strategy, in close connection with the United Nations 2030 Agenda, which encompasses the abovementioned aspects. The three related challenges (ecological transition, digital transformation, and social

5 An example lies in the work carried out by Fincantieri on the shipbuilding supply chain, which brought aggregation and enhancement of suppliers in the South. Supply chain strengthening processes, as in Leonardo's LEAP programme on aerospace, defense and security, must favour aggregation processes, bringing out most innovative realities and centres. A similar programme must be launched for the automotive sector and its components, notably in the face of the profound changes taking place in the sector, also through instruments similar to those activated in France by BPIFRANCE (Fonds d'Avenir Automobile). 45 sustainability), taken as a priority by the European Union in the guidelines issued by the new Commission, require restructuring the public sector6, to lay it at the centre of an innovative and sustainable development process (also through a cultural perspective), and break down challenges into concrete objectives on sectors and production processes, organisational structures, and human capital training. Attaining the objectives of an innovative industrial strategy of such magnitude requires a coordination entity, a dedicated task force, to provide all the administrations involved with consistent guidelines. Creating decent jobs, notably for young people and women, is both the assumption and necessary accomplishment of a Plan for the next decade, as the employment gap between Southern Italy and the rest of the Country has newly widened over the past ten years. The EU-28 recorded, on average, a 68.6% employment rate in 2018; in the same year, only 44.5% of Southern Italy’s population between 15 and 64 years was employed (1.5 percentage points less than in 2008), against 66.1% of overall Central-Northern Regions (0.5 percentage points more than in 2008). The gap between South and Centre-North has therefore increased from 19.6 to 21.6 percentage points. Translated into jobs, this means the Mezzogiorno area should have 2.9 million more employed people to reach the employment rate recorded in the Centre-North (still below the EU-28 average). Despite the employment recovery that began in 2014, employment levels are still far from the pre- crisis levels (2008) - as per 2018 average: 7.8% in Sicily, -5.7% in Calabria, -5.0% in Molise, -4.6% in Apulia, -3.6% in Basilicata, -3.3% in Sardinia, and -2.4% in Abruzzo; only Campania is still close to its 2008 values (-0.4%). Overall, in mid-2018 the number of employees was 276 thousand lower than in the same period in 2008 (-580 thousand young people under 35), while in the Centre-North the number was 382 thousand higher. Fragile employment dynamics, combined with weakened welfare capacity to respond to citizens' needs, led to an increase in social unease, which continued over the recovery years: the risk of poverty and social exclusion is more than double in the Mezzogiorno region versus the Eurozone average (45% of the overall population against 21.5%, Eurostat data). The job issue in Southern Italy also reveals deterioration in employment quality. The increase in labour demand over recent years has mainly been concentrated in the agricultural and services sectors (primarily tourism and personal services), not always able to offer professional stabilisation paths. Employment quality deterioration is confirmed by the incidence of involuntary part-time employment on total part-time percentages, significantly higher in Southern Italy (79.6% versus 58.7% in the Centre-North) and notably affecting the (few) women employed in Southern Regions. Furthermore, the “working poor” phenomenon is growing significantly: the incidence of absolute poverty among households in Southern Italy with an employed reference person doubled in 2018 versus 2008, reaching 8% (5.6% in the North and 4.9% in the Centre, respectively - ISTAT). The territorial dualism of our labour market is even more evident with reference to young people and women. The unemployment rate of young people in Southern Italy (main employment difficulties

6 The support of large companies will be crucial on these issues, including through implementation of concrete projects - e.g., Eni's work on circular economy and calculators, Fincantieri's investments in electrification, Terna's network modernisation, Snam's plans for sustainable mobility and hydrogen. The recent enlargement of 's 3SUN Factory in Catania and the European programmes on batteries are examples of Southern Italy’s industrial opportunities within the green economy, with a leading role to be played throughout the value chain. 46 relate to most qualified positions) reached 48.4% in 2018, against 24% in Italy’s Centre-North. The gap is even wider when looking at EU data: in 2017 the employment rate for the 15-34 age band was 28.5% in Southern Italy against the 57.4% EU average. The gender issue probably finds its most evident expression in southern women’s very poor participation in the labour market, a unique case in Europe. Women’s activity rate in Southern Italy is 41.6%, against 64.1% in Italy’s Centre-North, and approximately 74% within the EU-28 average - which makes the gender issue an emergency. In order to create decent jobs, and reduce social unease, we now need restart the build-up process across the Country, reversing the declining investment trend that mainly hit the industry, construction and services sectors, primarily in the Mezzogiorno region. Here, the remarkable level of labour market deterioration suggests that, pending cumulative effects on economic fabric and employment, it is appropriate to complement the re-launch of public and private investments with job incentive measures for young people and, above all, for women, recording the widest gaps compared to national and European scenarios, as noted by the European Commission in the Country Report 2020 - Italy. As far as young people are concerned, the current employment benefit is expected to be refinanced within the new European programming; starting from 2020, the long-term unemployment benefit is to be extended from twelve to twenty-four months.

Box 11. Employment and enterprise in the UN 2030 Agenda

The strategies and interventions set out in the above section "Structural policies and urgent measures for employment and enterprise" will impact on implementation of: Goal 5 (Gender Equality), in particular where it requires that women be guaranteed full and effective participation and equal opportunities for leadership (5.5), and adoption and strengthening of sound policies and enforceable legislation for promotion of gender equality and empowerment (5.c); Goal 8 (Decent work and economic growth), which prescribes promoting development-oriented policies that support productive activities, decent job creation, and entrepreneurship, encouraging the formalisation and growth of micro, small and medium-sized enterprises (8.3); by 2030, achieving full and productive employment and decent work for all women and men, including for young people (8.5);

substantially reducing NEETs by 2020 (8.6); protecting labour rights and promoting a safe and secure working environment for all workers, including migrant workers and those in precarious employment (8.8); and, eventually, strengthening the capacity of domestic

financial institutions to encourage and expand access to banking, insurance and financial services (8.10); Goal 9 (Enterprise, innovation and infrastructure), which prescribes promoting inclusive and sustainable industrialisation and significantly raising industry’s share of employment and (9.2); increasing the access of small- scale industrial and other enterprises to financial services, including affordable credit, and their integration into value chains and markets (9.3); updating infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes (9.4); and, eventually, upgrading the technological capabilities of industrial sectors, including by encouraging innovation and substantially increasing the number of workers in R&D sectors, and public and private R&D spending (9.5).

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The 2030 Plan for Southern Italy sets out transversal measures that complement the actions undertaken to implement the five missions pursued, aimed at the essential objective of strengthening production system competitiveness and creating decent jobs for young people and women. As follows, the first few measures launched or to be launched in 2020 within a structured policy and urgent measures for employment and enterprises:

1. Incentivising women employment Expected results - Increase female employment and participation of women in the labour world in Southern Italy, through an incentive for more structural hiring that complements the first impact (2020-2022) of the 2030 Plan for Southern Italy and anticipates its occupational effects.

Intervention lines - 100% contribution relief, lasting three years (European Commission authorisation required), applicable in the eight Regions of Mezzogiorno to all new permanent hiring of women, and conversion of their contracts from a closed-end term into an open-ended term.

Implementation - The relief applies within the limits of 8,060 euros per year for enterprises that hire permanent workers in the Mezzogiorno region. The measure will be introduced early-2020 and cover all recruitments until 2022. Notification to the European Commission.

Responsible entities - Ministry of Labour and Social Policies, Anpal, INPS

2. Investment-related tax credit in Southern Italy Expected results - Encourage reactivation of southern enterprises’ fixed capital accumulation, overall machinery and equipment functional to product/process innovation, also concerning the dimensional growth and aggregation processes introduced by the “Cresci al Sud” ("Grow in Southern Italy”) Project. Ensure time horizon certainty of tax benefits, to enable enterprises to better plan their investments.

Implementation - Starting from refinancing the measure as per 2020 Budget Law, it is necessary to ensure that the investment-related tax credit measure become structural in Southern Italy over 2021-2027, linking it to the new programming cycle of Structural Funds, to promote enhanced competitiveness of an increasing number of enterprises through automatic tools. More than 50 thousand applications were accepted in the first three years of activation, for subsidies exceeding 3 billion euros and subsidised investments higher than 8 billion euros. It is estimated that, for 2020 alone, the 675 million euro refinancing of the tax credit on capital goods for enterprises in Southern Italy (2020 Budget Law) could to additional 2 billion-euro investments.

Responsible entities - Agenzia delle Entrate (Inland Revenue Agency), Ministry of Economy and Finance (MEF).

3. "Cresci al Sud" ("Grow in Southern Italy” for SMEs) Expected results - Enhance excellent enterprises in the Mezzogiorno region, favouring their economic and dimensional growth. Contribute to developing, within a decade, the new "champions" of southern enterprises, able to invest in R&I, be listed on the Stock Exchange, and strengthen their penetration in the foreign markets.

Intervention lines - Investments in the capital of small and medium-sized enterprises (SMEs) also involving institutional, public and private investors; increase in aid for economic growth of enterprises in the Mezzogiorno region; support for southern SMEs with high potential, with a mix of grants and subsidised loans;

48 supply-chain incentives for aggregation and enhancement of suppliers of large enterprises operating in the Mezzogiorno region. In this context, a new incentive is expected, managed by Invitalia, with the contribution of Mediocredito Centrale - Banca del Mezzogiorno exclusively focused on accelerating the dimensional growth of medium-sized enterprises, through a virtuous combination of grants, loans and guarantees.

Implementation - The “Cresci al Sud” ("Grow in Southern Italy”) Fund, with an initial allocation of 250 million euros foreseen by the 2020 Budget Law (150 million for 2020, and 100 million for 2021), is the first step to implement the “Cresci al Sud” programme, which provides for lines of action on equity, debt and supply chain. The “Cresci al Sud” Fund is managed by Invitalia (which can rely upon Mediocredito Centrale - Banca del Mezzogiorno), and will be made operational through an ad-hoc agreement with the Presidency of the Council of Ministers.

Responsible entities - Invitalia, Mediocredito Centrale - Banca del Mezzogiorno, Ministry of Economic Development (MiSE).

4. The "Protocollo Sud" with Cassa Depositi e Prestiti Expected results - Increase the investments of Cassa Depositi e Prestiti (CDP) Group for enterprises and infrastructures in the Mezzogiorno region.

Intervention lines - Using CDP financial instruments for enterprises in synergy with cohesion policy. As to equity, full operation of the National Innovation Fund will guarantee support to enterprises and startups in Southern Italy starting from 2020. As to sustainability, specific initiatives will be activated in collaboration with CDP to accompany the Green Deal related interventions provided for by the 2030 Plan for Southern Italy 2030. As to infrastructure, CDP's new project-design initiatives will be used to increasingly support the 2030 Plan for Southern Italy actions. Furthermore, CDP’s new role, as envisaged by InvestEU and backed by cohesion policy, will allow activating specific funds, consistently with the 2030 Plan for Southern Italy 2030 logic (overall in the field of education, social infrastructures, ecological transition, and technology transfer).

Implementation - Memorandum of Understanding (MoU) between the CDP Group, the Minister for Southern Italy and Territorial Cohesion, and the Department for Cohesion Policy (DPCoe). The MoU provides for establishing a governing body (“Cabina di Regia”) for implementation and monitoring of the initiatives.

Responsible entities - DPCoe, Gruppo Cassa Depositi e Prestiti (CDP).

5. The "Protocollo Sud" with Invitalia Expected results - Promote the financing of strategic and innovative investment projects (primarily, large- sized), also to further attract investments made by large national and international enterprises, thus allowing targeted re-launch of industrial areas. Support the administration of development and cohesion policies in the implementation of the new method for accelerating investment activities in Southern Italy.

Intervention lines - Protracting and consolidating, through ordinary and national and European resources for cohesion, “development contracts” and other incentives issued by Invitalia aimed at supporting and strengthening industrial investments in Southern Italy, also with a view to international attractiveness; Refinancing tools to support entrepreneurship and promote technology transfer, to strengthen the innovation rate of southern enterprises and supply qualified and entrepreneurial job opportunities for young people in Southern Italy; Introducing new forms of incentives which, combined with the “Cresci al Sud” Fund, contribute to consolidation and growth of southern SMEs; Protracting and strengthening "system actions" in support of

49 cohesion administrations (first and foremost ACT), to promote administrative capacity enhancement, speed up implementation of the actions and interventions set by the 2030 Plan for Southern Italy, and construct the new cooperative method for enhanced implementation; Speeding up and consolidating Invitalia's function as national central contracting authority/procurement body, in order to guarantee an adequate stock of development-generating investments concentrated in the short-medium term, which can multiply growth in Southern Regions, also by identifying priority implementation lines.

Implementation - Memorandum of Understanding (MoU) between the Minister for Southern Italy and Territorial Cohesion, and Invitalia, to be implemented through a framework agreement with DPCoe and ACT, which establishes mutual commitments on intervention lines.

Responsible entities - DPCoe, Invitalia.

Box 12. Benefits for enterprises and entrepreneurship

Tax credit for investments in Southern Italy. Enterprises wishing to purchase machinery, plants and equipment can access a tax credit measure eligible in combination with other aid. Credit is differentiated according to enterprise sizing and region involved, as per the European regulation on State Aid; enterprises operating in specific sectors (e.g. steel and financial sectors) are excluded. The total resources available for 2020 amount to 674 million euros, which are estimated to enable total investments of around 2 billion euros over the year. The tax credit measures apply as per the following territorial break-down: Basilicata, Calabria, Campania, Apulia, Sardinia, Sicily: 45% for small enterprises up to max. 3 million euros; 30% for medium-sized enterprises up to max. 10 million euros; 25% for large enterprises up to max. 15 million euros. Abruzzo and Molise (as per Art.107(c) TFEU): 30% for small enterprises up to max. 3 million euros; 20% for medium-sized enterprises up max. 10 million euros; and 10% for large enterprises up to max. 15 million euros.

Tax credit in SEZs. Enterprises investing within SEZs may benefit of enhanced tax credit in respect of the measure generally applied. For each category of enterprise, projects with a total value of up to 50 million euros are admitted, with the same percentage of credit provided for by the general measure.

“Resto al Sud” (literally “I’ll stay in Southern Italy”). Persons younger than 46 without a permanent job, who are not entrepreneurs or registered firms for VAT purposes, and who reside or intend to transfer their own residence in one of the eight Regions of Southern Italy, may access “Resto al Sud” by submitting an application to Invitalia in order to obtain a non-repayable loan of 35% of the costs required for starting a business in some sectors (production of goods, industry, crafts, processing of agricultural products, fishing and ; provision of services to businesses and people; tourist-aimed services). The remaining 65% can be financed with a mortgage guaranteed by the SME Guarantee Fund, whose interests are covered with a capital contribution. By end-January 2020, over 11,000 applications had been submitted; over 4,500 were approved (Invitalia data, updated). The overall financial envelope is 1,250 million euros.

50

VI. A new Method: administrative regeneration

1. Main discontinuity: a cooperative method for enhanced implementation

The 2030 Plan for Southern Italy aims to start implementing, as from early-2020, the five missions pursued and accomplish them in 2030, following a well-defined path. National cohesion policy instruments include: five national development and cohesion plans (Italy’s Piani di Sviluppo e Coesione - PSC) for each mission, a development and cohesion plan for administrative regeneration, and some additional development and cohesion plans for actions in any case consistent with the missions pursued, to be entrusted to central and territorial administrations. The experience of recent years has highlighted administrations' progressive weakening in their guidance, impulse, implementation and project-designing capacity. Therefore, the main discontinuity pursued by the 2030 Plan for Southern Italy concerns the method to define and implement investment programmes and interventions. An enhanced cooperative method for implementation is proposed to administrations engaged in investment activities in Southern Italy, with measures capable of ensuring their timeliness and quality. The new method is based upon the following principles and criteria: - Strengthening the coordination and impulse role played by central administrations, by establishing dedicated steering committees for each mission (to ensure strategic coordination), and five national development and cohesion plans for each mission, with priority actions defined upon the cooperative method; - Strengthening the programming and implementation capacity of administrative bodies managing cohesion policy; - Enhanced cooperation (institutional, technical, and administrative) between central

51 administrations and local administrations in charge of investment programmes - whereby necessary, specific inter-institutional collaboration agreements or operational instruments are activated (covenants, sectoral and/or territorial institutional development contracts (a.k.a. CIS), programme agreements), laying down commitments and mutual responsibilities, as well as expected results in terms of quality improvement of people's lives and development opportunities, implementation timing based upon realistic and supervised time schedules, possible sanctions, and methods for exercising replacement powers; - Enhanced cooperation will also involve relations with the European Union, through the new European programmes for support and financing of structural reforms, linked to effective implementation of the intervention programmes of development and cohesion plans; - Concentrating interventions consistent with the missions pursued within strategic interest territories: SEZs, “inner areas”, marginalised territorial contexts, peripheries/districts of medium and large-sized urban areas to be regenerated; - System actions to ensure technical and administrative strengthening in implementation of interventions, including through activation of national competence centres (ACT, Investitalia, and Invitalia), and extensive and targeted use of central purchasing bodies and qualified contracting stations (national and local); - Support for project-designing, to identify funding for projects with adequate feasibility characteristics, to speed up the launch and implementation of interventions; - Simplification of 2021-2027 programming tools and a premiality system addressed to administrations. The only programming tools to be implemented in the next cycle will be Operational Programmes financed with European resources and development and cohesion plans (PSC); therefore, no complementary programmes will be activated, as they have always shown poor project-designing and, notably, poor spending capacity; - Streamlining of development and cohesion plan management procedures, through clear identification of institutional skills and definition of management, reporting and control methods, in order to reduce lead time between procedural phases; - Application of the active partnership principle with direct involvement of stakeholder organisations (labour, enterprise, active citizenship) involved in investment programmes for development and cohesion; - Scheduling commitments for each development and cohesion plan (PSC) and advertising information on the implementation of the 2030 Plan for Southern Italy, to encourage full transparency and control by citizens on the use of resources and results achieved; - Application of protocols of legality for implementation of interventions in the territories. The proposed method systematises the principles in force as per current legislation, and first implements the provisions introduced with the 2020 Budget Law; it also allows rationalising the actions launched considering the newly introduced criteria. At the same time, the 2030 Plan for Southern Italy applies an experimental approach, identifying implementation methods which, based upon the results achieved, can be extended and adopted for implementing programmes and interventions envisaged in the next programming cycle of European and national cohesion policy. This approach is also based upon principles consistent with the EU method and rules and shows marked compliance and harmonisation with the policy objectives of the 2021-2027 programming

52 cycle of European cohesion policy (see the Concordance Table of the actions provided for by this Action Plan).

Box 13. Prompt implementation of the 2030 Plan for Southern Italy

In order to generate instant impact, the implementation of the five missions pursued by the 2030 Plan for Southern Italy will begin as from the very start-up phase through: direct central actions, entrusted to ACT or other relevant subjects; actions planned within national, sectoral and regional development and cohesion plans, based upon their consistency with cohesion policy missions. Support interventions will accompany the actions throughout their implementation till the expected results have been achieved. For this purpose, an ad-hoc development and cohesion plan

(PSC) for "administrative regeneration" will be immediately launched, setting up the measures required to ensure timely and valuable public investment and administrative reinforcement.

Box 14. The UN 2030 Agenda and the New Method introduced by the 2030 Plan for Southern Italy

“The new method: Administrative regeneration” proposed by the 2030 Plan for Southern Italy will contribute to the achievement of Goal 16 (Peace, justice and strong institutions) of the UN 2030 Agenda, primarily within the interventions aiming to combat organised crime (16.4), fight against corruption (16.5), develop effective, accountable and transparent institutions at all levels (16.6), and ensure responsive, inclusive, participatory and representative decision-making at all levels (16.7).

Coordination and impulse: enhancing central administrations' oversight functions. The entities relied upon by the political Authority for cohesion will perform a key role in the definition and implementation of the 2030 Plan for Southern Italy, and re-launching investments in Southern Italy. Their actions will be organised to ensure conditions for timely implementation of interventions and programmes. DPCoe and ACT actions will be aimed at greater specialisation and accountability within their functions. DPCoe will support the Minister for Southern Italy and Territorial Cohesion as to coordination and strategic guidance on development and cohesion policies, with special focus on the missions pursued by the 2030 Plan for Southern Italy. ACT will oversee the implementation of the whole 2030 Plan for Southern Italy, starting with enhanced desk and on-site monitoring. Furthermore, ACT will be in charge of implementing the development and cohesion plan (PSC) for "administrative regeneration" and the actions requiring strong central coordination with the several administrations involved.

53 With the 2030 Plan for Southern Italy, the process for ACT reorientation will concretely start - ahead of its more organic reform plan - as to a part of its original mission, i.e. implementing interventions and acting "close" to territories and their administrations. Within this activity, ACT will closely cooperate with Investitalia, "mission institution" at the Presidency of the Council of Ministers dedicated to general investment activity, also to identify operational solutions for verification and implementation of infrastructure investments. DPCoe and ACT will implement the new method by virtue of a framework agreement with Invitalia, ensuring coordination between the signatory parties, the bodies directly supporting the Minister for Southern ltaly and Territorial Cohesion, and the Presidency of the Council of Ministers. The agreement furthermore identifies the interventions and territories within which the operational instruments for enhanced cooperation are to be implemented (covenants, programme agreements, sectoral and/or territorial institutional development contracts)7. Steering Committees. Central administrations in charge of cohesion will ensure support and assistance to the new Inter-institutional Steering Committees, chaired by the Minister for Southern ltaly and Territorial Cohesion, which will include other ministries involved in the implementation of the 2030 Plan for Southern Italy missions, and representatives from regional and local authorities. The Committees will carry out strategic coordination tasks and identify investment priorities for each of the five missions, including by involving socio-economic parties. Based upon the analysis carried out by DPCoe and ACT, the Steering Committees will see to: activating reprogramming procedures whereby the sectoral or territorial development and cohesion plans (PSC) fail to respect the time schedule milestones in terms of financial commitments and progress of interventions; and proposing to the FSC central governing body (Cabina di Regia) the actions or measures worth receiving the reprogrammed resources. The Steering Committees may also activate procedures for substitute power of attorney for implementation of interventions, pursuant to law. Task Forces for implementing "missions" and "being close to places". In order to ensure timeliness and good quality of investments, the 2030 Plan for Southern Italy applies an approach based on close vertical administrative cooperation between central and local authorities, fuelled by ad-hoc measures to strengthen the action and technical capacity of the implementing administrations. In order to encourage rapid implementation and provide beneficiary bodies with concrete support, suitable measures are organised and activated within the system actions under ACT competence, to identify and adopt acceleration solutions in relation to specific objectives. Concerning the implementation support to specific territories, ACT will activate assistance actions to the administrations in charge of expenditure, through ad-hoc cooperation agreements (pursuant to Article 44 of Decree-Law No. 34/2019).

7 Whereby ad-hoc analysis reveals investment needs are consistent with Piano Sud 2030 missions and with the new territorial policy, the Minister for Southern ltaly and Territorial Cohesion may activate a territorial institutional development contract (CIS) per Region within most lagging behind areas in Southern Regions or whereby ad-hoc emergency measures apply. 54 Whereby relevant specific issues are to be addressed to speed up the 2030 Plan for Southern Italy implementation, ACT may, upon indication by the Minister for Southern ltaly and Territorial Cohesion, activate thematic and/or territorial task forces in line with the missions pursued (replicating the intervention model, currently operational, adopted by the Task Force Edilizia Scolastica). EU support - The European Commission Structural Reform Support Service (SRSS). The policy objectives laid down in the 2030 Plan for Southern Italy lend themselves to collaboration with the Structural Reform Support Service (SRSS), aimed at helping EU Member States design and implement structural reforms to encourage job creation and sustainable growth. In implementing the 2030 Plan for Southern Italy, therefore, these European resources will promptly be used, also in view of the technical support provided by the European Commission and the OECD. Within the new 2021- 2027 cycle, a new ad-hoc Fund will enable us to move from assisting to financing the implementation of structural reforms consistent with the missions of the 2030 Plan for Southern Italy. To this end, DPCoe, which has long liaised with the SRSS, will continue to be the "national focal point" for assistance and reform programmes. Support for project-designing. The 2030 Plan for Southern Italy provides for activation of an ad-hoc project-designing Fund to ensure quality of investments and speedy commitment and expenditure of available resources. The Fund is intended to create a set of immediately implementable projects to be financed, also within the 2021-2027 programming of European cohesion policy. In order to support relevant administrations in project-designing and implementing infrastructural interventions, the resources from the above Fund will finance the technical project-designing costs of infrastructural interventions positively assessed by relevant technical bodies at the Presidency of the Council of Ministers. Positive assessment results from: effective compliance with development priorities and needs of beneficiary territories; possible requirement to face emergency situations, to be supported by the administrations responsible for interventions, also in collaboration with the body in charge of project-designing public assets and buildings as per Article 1(162) of Law No. 145 dated 30 December 2018, as well as Invitalia, in its function as central purchasing body and national contracting station. Priority access to available funding will be granted to implement projects with successfully completed executive project-designing. Central purchasing bodies and national competence centres. In order to speedily award project- designing and implementation of the 2030 Plan for Southern Italy, adequate measures will be taken to make the contribution of central purchasing bodies more effective and intense in supporting the action of those responsible for implementation, and the beneficiaries of interventions. Local authorities, as implementing bodies and beneficiaries of the 2030 Plan for Southern Italy interventions, will make use of qualified provincial and regional central purchasing offices in the territory. Based on the specific needs identified, and above a given intervention threshold, local authorities may also activate national qualified purchasing centres. Special attention will be paid to possible reliance on Invitalia, whose role as a central purchasing body and national contracting station is established by current regulations. Invitalia’s record ensures very competitive standards of

55 effectiveness, lead time, and costs, which can be made increasingly available not only to central administrations, but also to local administrations in Southern Regions. In relation to specific needs, system actions may also be activated aimed at technical strengthening for interventions implementation. System actions are carried out through national competence centres (ACT, Invitalia, the ad-hoc body in charge of project-designing public assets and buildings) which will provide direct support to administrations holding resources, also to create a network of qualified contracting stations operating at local level. The network will enable concentrating, within national competence centres, resources aimed at funding greater and more complex projects, and providing duly qualified local contracting stations with the necessary technical support to implement smaller projects. Simplification and accountability for implementing entities. The next cycle will be endowed with strongly simplified programming tools, using both European and national resources. As far as European cohesion policy 2021-2027 is concerned, programmes will be significantly reduced, favouring the activation of multi-fund Operational Programmes (ERDF and ESF). Italy is engaged in negotiations to maintain higher quotas of European co-financing versus the Commission's initial proposal, yet the Government undertakes to ensure the principle of additionality through national co-financing quotas higher than the minimum levels provided for by regulations. These additional national quotas will be exclusively assigned to those administrations that commit themselves to programming and spending such resources on Operational Programmes, also through the above referred support actions. In less developed regions, additional national co- financing quotas not aimed at funding EU programmes will be diverted to national development and cohesion plans for priority actions and interventions, consistently with the missions pursued and in compliance with territorial destination constraints. Regarding national cohesion policy simplification, the tools activated will mainly concern spending acceleration, ensuring in any case maximum efficiency and effectiveness of public interventions and accountability of implementing entities. The following measures are envisaged: - One single sectoral or regional development and cohesion plan (PSC), consistent with the missions pursued by the 2030 Plan for Southern Italy, with unified rules for all the programming cycles in force (as seen above); - One single Supervisory Committee for each development and cohesion plan (PSC), entitled to approve, upon indication by the Managing Authority, any necessary implementation changes to PSCs, also based upon enhanced monitoring and assessments supporting the implementation of the 2030 Plan for Southern Italy, consistently with the missions pursued; - One single managing authority for each PSC (and each central direct action) with consequent responsibility for quality, timing and expected results of interventions; - One single certifying body entitled to request reimbursements from the FSC, and register national policy projects falling within the certification scope of OPs financed with Structural Funds;

56 - Compliance with the principle of competence - To avoid fragmentation of responsibilities, plans entrusted to single administrations only encompass the implementation of interventions falling within the scope of their own institutional competence; - A flexible and more streamlined management and control system, aimed at a least number of steps within organisational structures, thus reducing documentary controls whereby public administrations oversee implementing interventions directly (hence they are subject to internal and external control systems); - Unified procedures for requesting and transferring FSC resources, regardless of their related programming cycle; - Higher percentage of advance transfers, in line with the public procurement code (Codice dei Contratti) to ensure adequate cash availability.

Active partnership. The 2030 Plan for Southern Italy relies on the involvement of socio-economic parties, civil society and citizens (regional, local, city and other public authorities, trade unions, employers, NGOs, and organisations promoting social inclusion, gender equality and non- discrimination). Partnership principle application (as per the European Code of Conduct on Partnership) provides for substantial involvement of all actors, ensuring debate and structured dialogue between institutions and stakeholder organisations, within the phases of preparation, implementation, monitoring, and evaluation of investments.

2. Monitoring, evaluation, control, transparency

Enhanced monitoring and surveillance. Within institutional monitoring and assistance to ensure National Monitoring System data quality, ACT will ensure targeted control actions to guarantee quality, completeness and significance of data on development and cohesion plans (PSC) and direct actions. By end-February every year, each administration holding resources will provide both DPCoe and ACT with a report on the implementation progress of its own PSC or direct action (data updated at 31 December of the previous year). The report will be laid down in a format pre-established by DPCoe and ACT. Based upon monitoring data (and implementation progress reports), ongoing surveillance will be carried out to support successful achievement of objectives and expected results, subject to evaluation within the Supervisory Committees for each PSC. Monitoring, systematic evaluation and debate on the procedural, financial and physical progress of projects relating to PSC and direct actions will allow defining adequate support and acceleration actions by ACT, along with reprogramming and reorientation of assigned resources. Based on the information provided by individual administrations and ACT, DPCoe will issue an informative note on the progress made within PSCs and direct actions, which the Minister for Southern Italy and

57 Territorial Cohesion shall submit to CIPE (Inter-ministerial Committee for Economic Planning) on an annual basis. Assessment. The "what works" model. In order to confirm or improve its own action and fuel partnerships' debate, the 2030 Plan for Southern Italy aims to progressively acquire knowledge of what does work among the actions either accomplished or in progress, thus identifying what is useful and effective. For this purpose, assessments will be conducted aimed at identifying the actual results pursued by the interventions carried out and the capacity of the implementation mechanisms initially theorised, as well as in-depth analysis and timely checks on the effectiveness of the projects implemented or still in progress8. Upon indication by the Head of DPCoe, NUVAP (Evaluation Unit), in collaboration with the Evaluation Units of the central and regional administrations involved, will define and coordinate an operational strategy to promote and carry out relevant evaluations on the initiatives set forth by the 2030 Plan for Southern Italy, also in synergy with other evaluation activities relating to EU cohesion policy. ACT, through its Verification Unit (NUVEC), will promote and carry out verifications and effectiveness analyses on public works or specific actions and interventions relevant for the implementation of the 2030 Plan for Southern Italy. Management and controls. ACT will ensure coordination of procedures and control methods based on standard methodologies and will carry out inspections on a sample of operations and projects, in order to verify the implementation progress of projects and/or services carried out. Relevant administrations will establish, for each development and cohesion plan (PSC), an effective management and control system (a.k.a. SIGECO) based on simplification criteria, laying down relevant procedures, organisational structure, and information system. NUVEC will examine effective functioning of these management and control systems; based on the outcomes of the checks carried out, or whereby PSCs show serious implementation irregularities or difficulties, the Steering Committees shall see to activating adequate reprogramming or replacement procedures. Transparency and communication. NUVAP, through the OpenCoesione Portal, will ensure online publication (every two months; open format) of national monitoring system data on individual projects related to the 2030 Plan for Southern Italy, tracking their connection with relevant development and cohesion plans and reference actions. The Portal provides detailed data on resources assigned to PSCs and actions, in relation to projects, costs and financial progress, beneficiary places, thematic areas, subjects involved, time schedules, actual implementation times, and relevant indicators. To ensure transparency and accountability on the opportunities offered, adequate information will be provided on the use of public resources activated by the 2030 Plan for Southern Italy. To such end, ACT will issue an ad-hoc Communication Plan aimed at making all information available to the public and usable in a simple yet accurate way, with regard to: programmes and actions (both planned and/or accomplished), implementation progress and ongoing phases, achievements and results attained. Each administration holding resources will publish, in its website dedicated section, due

8 Assessments and verifications will also be supported by the "SI.VALUTA" and "ASSIST" Projects, funded by "PON Governance 2014-2020". 58 information on its relevant plan and/or action, specifying the opportunities offered and the implementation progress accomplished.

3. Countering corruption and mafias

Preventing and countering corruption and organised crime are a national priority, in Southern Italy as in the rest of the Country. A paradox requiring our deep reflection concerns mafias' ability to unlawfully unite our Country: a social and territorial burden in Southern Regions, a colonisation factor in productive Northern Regions, as certified by the National Anti-Mafia Directorate (Direzione Nazionale Antimafia - DNA). Cohesion policy, created to unite Italy in legality and development, must consider the fight against mafias as a priority for political and institutional action, which should fully involve public opinion. Despite the measures undertaken by institutions and several civil resistance experiences, the grip of organised crime in several Southern Italian territories still depresses free private initiative of economic operators, discourages external investments, and often illegally conditions public administrations’ action. "Maladministration" and public corruption, albeit autonomous mafia phenomena, aggravate the economic and social marginalisation of several southern areas, notably of the most vulnerable and weak sections of society. According to the results published in Istat latest survey on (2017), Southern Italy holds the top record of corruption cases over the three years preceding the interview. Families and businesses resident in Southern Italy are confirmed as being most exposed to corruption in key sectors such as assistance, employment, and healthcare. Some indispensable administrative tools aimed at preventing mafia crimes and corruption, launched in the last decade, have significantly reduced the influence exerted by criminal pressure. At the same time, however, in spite of ANAC (Autorità Nazionale Anti-Corruzione) reiterated attempts to prevent unnecessary controls and constraints, these tools have sometimes been perceived as a further procedural burden at the expense of timely administrative action, in the absence of investments made on administrative-operational capacity strengthening, and digitalisation of public administrations. On the contrary, the principles of integrity, legality and transparency must be affirmed as a widespread tool and practice of public action in Southern Italy. They must not be affirmed as ends in themselves, rather as functional to achieving the objectives identified by the 2030 Plan for Southern Italy to reduce current territorial gaps, without affecting administrative actions’ efficiency and timing. Therefore, the 2030 Plan for Southern Italy proposes strengthening some existing administrative prevention measures precisely aimed at countering corruption and mafias, combined with the objective of accelerating investments, through three main intervention lines: (i) certification and traceability; (ii) digital transformation; (iii) widespread control and self-assessment. Certification and traceability. The 2030 Plan for Southern Italy requires that central purchasing bodies and contracting stations involved in investments commit themselves to promoting constant and

59 preventive use of anti-mafia certification tools by economic operators eligible to contracting with public administrations - i.e. enrolling in the “white lists” held at Prefectures. This would considerably reduce the time required to complete contract award procedures and the risks of criminal pressure influence, including within subcontracting phases, as shown in a recent study published by IRPET (2019)9. This activity may also be implemented through ad-hoc protocols of legality stipulated with relevant Prefectures, in the context of operational tools for enhanced implementation. Digital transformation. The 2030 Plan for Southern Italy furthermore aims at enhancing digital transformation processes (funded by development and cohesion policies) within investment-cycle administrative procedures that experience duration and/or timing issues and prove highly vulnerable to criminal influence phenomena linked to corruption and/or mafias. The objective of the 2030 Plan for Southern Italy is to make more effective and binding all the data supply system updated by central purchasing bodies on behalf of administrations in charge of investments, to enable tracing all transactions. The information collected will therefore be made available to public administrations in charge of procurement (using such information as reference parameters), and to institutions in charge of controlling expenditures, thus implying no further burdens on operators. Enhancing the existing digital platforms managed in coordination with ANAC will enable attaining the above objective. Widespread control and self-assessment. The 2030 Plan for Southern Italy intends to develop a network of interconnected and inter-operating administrations, by drawing upon the digital transformation of implementing procedures, and network technologies. This will enable enhancing the knowledge capacity of national/local administrations holding investments, further saving resources, and speeding up public contracting procedures. In the experimental phase, the 2030 Plan for Southern Italy envisages implementing performance and anomaly indicators, including on corruption (red flags devised by ANAC in recent years), within public procurement activities by central purchasing bodies involved in the investment programme funded by development and cohesion policies. Central purchasing bodies can thus draw upon these indicators to acquire in-depth knowledge of their own public contracting cycle and in respect of central purchasing bodies having comparable organisational-operational features. This measure is aimed at enhancing administrations' information capacity throughout procurement/awarding procedures, as well as assessment and internal control activities. A collaborative supervisory network. For the purposes of administrative prevention of corruption in the implementation of cohesion projects, the 2030 Plan for Southern Italy aims to capitalise on ANAC positive experience of "collaborative supervision", which enables the Anti-Corruption Authority to support contracting authorities along the whole path that goes from setting the tender, through the award phase, up to works execution. At regional and local level, the model can be replicated by building a network of collaborative supervisory teams duly trained by ANAC, drawing upon collaboration with the territorial anti-corruption units of Guardia di Finanza and/or other law- enforcement bodies.

9 The study published by IRPET on data relating to public procurement market states that awarding contracts to firms with white-list certification enables reducing - by one month (30.9 days) - the lead time between the award phase and works execution start. Such significant effect in statistical terms implies halving the duration of the above lead time, which in Tuscany lasts, on an average, approximately 60 days for public works procedures with non-registered operators. 60 Task Forces on city councils dissolved for mafia infiltration. In order to regain control over territories and citizens' consensus, the State has the duty, within city councils dissolved for mafia infiltration, to give proof of high administrative capacity, guaranteeing essential services to citizens and investment programmes that can provide places with future perspectives, freeing people from mafia blackmail. Within the missions and investments of the 2030 Plan for Southern Italy, ACT will establish ad-hoc task forces to assist city councils dissolved for mafia infiltration and support their capacity to plan and make investments.

4. A programme aimed at strengthening public administrations: 10 thousand young people for development and cohesion

Enhancing the administrative capacity is a priority requirement at all levels of government and within all public policies, as highlighted by the Specific Recommendations the European Commission has provided to Italy in recent years. Public administrations' project-designing and implementing capacity has significantly dropped over the last ten years, also due to a decreased number of civil servants and to their increased average age: from 3,436,688 public employees in 2008 to 3,243,435 in 2017 (3,179,172 if equal public administrations are considered). Data are even more alarming if attention is focused on the number of civil servants in local and regional authorities in Southern Italy (excluding NHS staffs), who are the main recipients of most cohesion resources: in 2007-2017, units passed from 189,839 to 167,352, with an approximately 12% decrease (well above the national average). However, more significant data concern the average age of civil servants, which, at end-2017, rose to 55.45 years (100,208 out of the overall 167,352 employees were older than 55 years). A massive exodus of civil servants is going to take place in the next ten years, notably within local and regional authorities. Such exodus will only be partially offset by greater productivity deriving from public administration digitalisation. Reduced administrative capacity will mainly relate to high-level professions that technology can only partially replace - a greater number of high-level professions will instead be required in some cases. This phenomenon has obvious negative impact on investment management in less developed regions and marginalised areas; above all, it weakens citizenship rights in those territories, with significant depopulation repercussions as well. Implementing the 2030 Plan for Southern Italy requires regenerating public administrations, through full and active involvement of local authorities both in Southern Regions and “inner areas”. A key role will be played by the selection, hiring, initial training and networking of the professions required to manage implementation-related activities within the 2030 Plan for Southern Italy and the new programming cycle. A dedicated additionality-based national programme is therefore essential to enhance the skills required within the intervention areas of the 2030 Plan for Southern Italy. The programme is to lay down: innovative methods for identifying the skills required; virtuous, transparent and fast selection and recruitment processes; attention to initial training and networking

61 of the newly recruited units. The aim therefore must not only lie in recruiting young professionals, rather in creating a professional community or, better, multiple professional communities that embody the most qualified and top-rated support from public administrations in the region, notably in its most marginal areas and sectors. Additionality to ordinary turnover rates within public administrations in the next decade will be an essential feature of the programme: a ten-year horizon is required to draw upon resources both from the current programming cycle (2014-2020) and the next one (2021-2027). Programme effectiveness will, however, be ensured by immediate activation of staff selection and recruitment procedures (via cohesion funds), even before the individual institutions are entitled to hire new personnel. The programme will devise a virtuous mechanism for selection and recruitment of highly qualified professionals, aimed at managing all the phases of the investment cycle funded by European and national cohesion resources. The selection and recruitment procedures are to be activated in 2020, with a multi-year horizon: 10 thousand young graduates will be recruited by public administrations to enable implementing the 2030 Plan for Southern Italy, at local level in the Mezzogiorno region and within “inner areas”, as well as within the national task forces established by ACT (administrative-implementation support), and within DPCoe (to enhance policy coordination, planning and evaluation).

The national programme is broken down as follows: - Recognition of administrations’ qualitative and quantitative needs, by the bodies directly supporting the Minister for Southern Italy and Territorial Cohesion, in collaboration with the Ministry of Public Administration, the Ministry of Economy and Finance, Regions, and Local Authorities; - Identification, consistently with the guidelines issued by the new European Commission, of organisational-managerial, digital, technical and project-designing skills to enhance administrations to ensure implementation of the 2030 Plan for Southern Italy; - Agreement, between Government, Regions and Local Authorities (individually and/or associated), for absorbing the personnel selected and assigning them to Public Administrations once they have been entitled to hire new staffs; - Regulatory provisions authorising Local Authorities, even in critical financial situations, to recruit personnel aimed at managing cohesion interventions; - National selection for recruitment convertible into open-ended contracts by 2029, through long lists of eligible candidates based upon medium-term needs; - Allocating available resources to administrative strengthening and governance of the EU 2014-2020 programming cycle for prompt activation of the action path of the 2030 Plan for Southern Italy10;

10 Reprogramming 160 million euros from "PON Governance 2014-2020" would enable the 2030 Plan for Southern Italy to cover 1,500 recruitments over 2020-2022. 62 - Programming 2021-2027 EU and national resources to implement the administrative regeneration programme.

Box 15. A labour plan for Campania

The Labour Plan of Regione Campania, currently at an advanced development stage through the RIPAM (Riqualificazione per le Pubbliche Amministrazioni) course-selection formula, provides a valuable reference point for initiatives to be encompassed in the administrative regeneration programme.

As follows, the Work Plan figures: 322 local authorities involved in the collaboration agreement with Regione Campania; 167 local authorities having conferred the required delegation to RIPAM Inter -ministerial Commission for hiring their respective staffs (C and D rankings); 500 administrative acts adopted; 3,000 staffs required; 150,000 candidates to pre-selection tests; 2,250 posts offered; 6.5 million euros covering the selection procedure costs, entirely borne by the ESF Campania 2014-2020.

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VII. “Being close to Places". A new territorial policy

The 2030 Plan for Southern Italy proposes a new territorial policy able to respond to the national dimension of territorial cohesion - not only reducing current gaps between North and South but also between centres and peripheries, urban areas and “inner areas”, trying to restore the key role of places so far marginalised by public policies, which now require renewed attention to secure essential services, and re-launch their productive vocations. Being addressed to marginalised and most vulnerable areas in the Country, the intervention strategies and ad-hoc actions envisaged within the new territorial policy aimed at "being close to places" are connected to numerous Sustainable Development Goals envisaged in the UN 2030 Agenda. Cultural heritage is both source and essential perspective of the new territorial policy, a tool for social connection and a platform for promoting Italy’s image worldwide. In this context, a transversal action on culture can be developed to enhance urban and inner, rural, peripheral, and marginalised areas, and ensure a new offer capable of satisfying the growing demand for sustainable tourism. The aim is to strengthen Italy's positioning within international markets, also by activating the potential of cultural and creative industries, still largely unexpressed in Southern Regions. The new territorial policy is aimed at Italy's reconnection by re-launching the National Strategy for “Inner Areas” (SNAI) within the urban regeneration carried out through "PON Metro" and institutional development contracts (CIS), and acknowledging insularity-related disadvantages. Nevertheless, the success of the new territorial policy will be measured upon its ability to bring real and "visible" changes to places: hence, great projects (“flagship projects”) will be required to make the new policy noticeable and recognisable in Southern Italy. A policy aimed at "being close" to places, in particular Southern Italian territories, acknowledges the socio-economic value of re-using the assets confiscated from mafias. Within the EU, Italy has cutting-edge legislation on confiscated assets and approved a national strategy for recovery and re- use of confiscated assets. The 2030 Plan for Southern Italy aims to reinforce such lines of action in collaboration with the Ministry of the Interior also in view of the 2021-2027 programming cycle. The Plan for recovery and re-use of exemplary confiscated assets, which we will implement with 120 million-euro resources in Southern Italy, goes in this direction: in 2020, 10 symbolic instances will be

64 identified and returned to local citizens for cultural and entrepreneurial activities, thanks to simplified procedures. At the same time, greater transparency of data on confiscated assets will be ensured, by matching digital systems for assets geo-positioning. The territorial reconnection project is to be carried out jointly with local communities, enhancing the main role of active citizenship, encouraging the exchange of good practices and promoting a greater number of social innovation centres. The best experimental experiences within the National Strategy for “Inner Areas”, as well as several virtuous instances in urban suburbs (consolidated around "PON METRO 2014-2020"), encourage us to continue with greater determination in this direction aimed at democratic regeneration.

1. Re-launching the National Strategy for “Inner Areas”

A remarkable portion of Italy's territory has undergone strong marginalisation over recent years, starting with depopulation and progressive deterioration of essential services accessibility (healthcare, education, mobility), resulting into real isolation such to impact on resident citizens’ quality of life, and compromise the attractiveness of those territories and their related economic activities. “Inner areas” are disseminated throughout Italy, from North to South, from the Alpine Valleys to the Apennines, as far as major Islands, presenting highly diversified features from each other, and even within themselves. And yet these areas are not only united by marginalisation; they share several factors such as: environmental and natural heritage; traditional know-how and styles of life; polycentric models and active communities; sustainable development potential (combining both tradition and innovation) largely unexpressed and sometimes repressed by context factors. The marginalisation process does not only produce political repercussions ("redemption of places that don’t matter") but also trigger socio-economic consequences connected to territory abandonment: property income polarisation, degradation and hydrogeological instability costs, above all because remarkable potentials for development were not activated and ended up being excluded from "agglomeration" processes. “Inner areas” account for approximately 60% of Italy's surface, 70% of mountain areas and almost all the Country’s woodland heritage. Still today “inner areas” house almost a quarter of the total population, hence they require an integrated policy. The National Strategy for “Inner Areas” (SNAI) stems from such awareness. This "experiment" attracted the attention of the European Commission, with which a 5% reserve is being devised for “inner areas” within Operational Programmes (OPs) financed with ESI Funds in the next programming cycle.

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Box 16. The National Strategy for “Inner Areas” to date

The National Strategy for “Inner Areas” (SNAI), promoted in 2012 by Fabrizio Barca, currently involves 72 "project areas": 1,061 Municipalities (13.4% of the total, 26% of “inner areas” Municipalities), about 2 million inhabitants (3.4% of the total, 15.5% of the population of Municipalities classified as “inner areas”) who live across approximately 51 thousand sq. kms (16.7% of the Italian territory, and 28.4% of “inner areas” surface,

respectively). At December 2019, 47 "area strategies" had been approved by the National Technical Committee for “Inner Areas” (CTAI - Comitato Tecnico Nazionale Aree Interne), which coordinates the National Strategy for “Inner Areas”, 24 framework programme agreements had been signed, and more than 700 million euro investments had been activated. Interventions are in progress in sectors such as mobility, education, and healthcare; hence, they contribute to improving services and reducing citizenship gaps. Aggregation of functions and services has very often activated greater efficiency and administrative simplification.

All areas have set up municipal associative processes, based upon a territorial system logic

and integrated strategic planning (in December 2019, 47 Areas had defined inter- municipal agreements or conferred functions to "Unions of Municipalities" - the remaining areas are defining the related conferral). Among the most advanced experiences, it is worth highlighting the "pilot areas" in Tuscany, Emilia-Romagna (Appennino Reggiano), , as well as Abruzzo (Basso Sangro) and Sicily (Madonie). The first phase of the National Strategy for “Inner Areas” mainly focused on more/most remote municipalities, classified as "peripheral" and "ultra-peripheral" - namely, municipalities located at 40-75 minutes, and at more than 75 minutes, respectively, from services.

All the development strategies are to be launched in the previous programming period defined by 2020.

Strong actions for re-launching the National Strategy for “Inner Areas” are now necessary, growing from experimentation to structuring a real national policy, extending the action to the remaining municipalities classifiable as “inner areas” and paying greater attention to strategies for localisation of production and job creation. The re-launch action will be supported by additional funding provided for by the 2020 Budget Law: 200 million euros starting from 2021; additional 90 million euros as from 2020 for interventions aimed at supporting economic, craft and commercial activities (30 million euros per year for 2020, 2021 and 2022). These resources will be complemented with the reserve envisaged by the new 2021- 2027 programming cycle.

66 The re-launch of the Strategy will be implemented via the following actions: - Extending the scope to “inner areas” not involved in the ongoing pilot phase, safeguarding a delineation method that enhances the characteristics so far tested, namely participation, inclusiveness, measurement, and simplification (in line with the indications of the European Code of Conduct on Partnership), also promoting the associative processes of relevant Municipalities, as envisaged in the Strategy; - Introducing a premiality system, to reward best-performing territories (quality of public services offers; creation of new jobs) with the right incentive to continue and consolidate the improvements attained; - Consolidating “depopulation” as a key criterion for inclusion in the Strategy and access to resources, also assessing the socio-economic development conditions of candidate areas, and their level of tangible and intangible infrastructure; - Streamlining the definition of area strategies - i.e., reducing the number of steps ranging from the analysis of intervention needs to the strategic designing phase, and safeguarding the participatory method for public scrutiny; - Further simplifying the procedures for definition and undersigning of programme agreements, and for implementing, monitoring, and financial reporting; - Strengthening the role played by ACT in charge of SNAI implementation; - Strengthening the Technical Committee for “Inner Areas” (Comitato Tecnico Aree Interne), by enhancing its inter-ministerial nature (sounder collaboration between the central administrations that compose it) and inter-institutional nature (greater role entrusted to local beneficiary bodies); - Enhancing the federation of “Inner Areas” projects and communities, as a forum for exchanging experiences and good practices, sharing know-how on SNAI implementation, and spreading the reputational capital; - Fostering partnerships, also through greater involvement of the “Inner Areas” Citizens Forum, as a networking and growth opportunity for the "SNAI community".

Re-launching the National Strategy for “Inner Areas” involves ad-hoc policies, as well as further actions and interventions. Nevertheless, the success of the National Strategy for “Inner Areas” will be determined by its ability to involve and steer the entire ordinary public action such to make it increasingly "close" to territories (from identification of essential levels of social benefits (LEP - Livelli Essenziali di Prestazioni) to infrastructure equalisation implementation), consistently with the priority benefits acknowledged within the autonomy process set up by the Minister for Regional Affairs. Likewise, the new legislation on small municipalities should be implemented promptly. The National Strategy for “Inner Areas” furthermore encompasses an active policy aimed at supporting and attracting economic, craft and commercial activities through the ad-hoc Fund allocation (90 million euros) provided for by the 2020 Budget Law. In some cases, such activities provide space and opportunity for socialising, hence they should be preserved. In this context, in collaboration with the “Dipartimento per l’Editoria” at the Presidency of the Council of Ministers, tools are being devised to support and preserve newsstands (i.e., besides being places of culture and

67 democracy, they can also offer new services). Being settled within “inner areas” may also prove an excellent investment for enterprises in the long run: this is the case of - its commitment to keep branches open in hundreds of small municipalities was expensive but definitely rewarded by ecommerce increase and preservation of a widespread network of postmen/women and deposits at territorial level. “Inner areas” isolation must be broken above all on the digital front: the latest meeting session of the Ultra-Wide Band (UWB) Committee, chaired by the Minister for Technological Innovation, set out the required actions to strongly accelerate UWB implementation in so-called "white areas" (which include “inner areas”) and activation of service vouchers to citizens and enterprises. The "Borghi del Futuro" Project (literally "Hamlets of the Future") is currently being developed in collaboration with the Department for Digital Transformation, to turn Municipalities into "Smart Municipalities" for experimentation and dissemination of emerging technologies, through complete digitalisation of administrations, and creating new employment opportunities. A shared strategy for “inner areas” guarantees monitoring and management of territories. In collaboration with the Ministry of Defense, we are mapping dismissed military facilities so as to redevelop them (also via EU funds) and, based upon Air Force data, share details on the structural conditions of viaducts and mountains - e.g., keep under control the levels of rivers and streams. A shared strategy for “inner areas” means culture-related economy. "Matera 2019 - European Capital of Culture" was an indisputable success, made even more important and valuable by the fact it involved an “inner area”. This indicates a clear path for: cultural and creative production potentials; sustainable tourism attraction; and ability to disseminate innovations starting from culture, strengthening Italy's positioning within international competition. With this in mind, the Ministry of Cultural Heritage and Activities and Tourism (MiBACT) has developed action lines that are closely linked and complementary to “inner areas”, aimed at recovering and enhancing the "long distance" experience, and reactivating places and routes of memory and beauty.

Box 17. Culture and Beauty to relaunch “Inner Areas”

Recovery and enhancement of “slow mobility” territories Expected results - Stimulate new forms of mobility that impact positively on the tourist industry of small towns, making them more accessible and user-friendly through pedestrian and railway itineraries. Intervention lines - Identifying, georeferencing and securing tourist pedestrian paths to create and promote a real network of “walking trails” in Southern Italy. Inspecting the paths identified, securing and purchasing of rolling stock to revive “historic railways” and dismissed train stations.

Responsible entities - Ministry of Cultural Heritage and Activities and Tourism (MIBACT),

RFI - Rete Ferroviaria Italiana (Italian Railway Network)

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The 100 “Borghi” (hamlets) of Southern Apennines Expected results - Redevelopment and networking of 100 cultural hamlets in Centre-South Apennines, through recovery and enhancement of historic residences and regionwide cultural heritage, enabling sites outside large tourist flows to become noticeable and better known. Intervention lines - Recovery of public and private cultural heritage; rehabilitation/upgrading of real estate assets, including private ones, through support for investments in minor construction; communication activity for territory promotion. Implementation - Public call for selection of “borghi” (hamlets) eligible to join the programme of interventions, also in view of their participation in the National Strategy for “Inner Areas”. Implementing agreements between the Ministry of Cultural Heritage and Activities and Tourism and relevant local authorities. Allocation of ad-hoc resources for interventions on public structures, and additional contributions for further tax deductions to private individuals, including through a dedicated revolving fund. Responsible entity - Ministry of Cultural Heritage and Activities and Tourism (MIBACT).

Furthermore, the National Strategy for “Inner Areas” is to underlie the ecological, equitable and sustainable transition of our economy and society, to be implemented through the Italian and European Green Deal with a necessarily strong territorial connotation. “Inner areas” sustainability will be promoted through a plan coordinated by the Ministry for Agricultural, Food and Forestry Policies, aimed at creating small and medium-sized hill reservoirs throughout the territory to generate electricity and channel water against hydrogeological instability. A "Journey through Inner Italy" will take place in the coming weeks, to see the lights and shadows of the areas addressed by the Strategy, trying to weave the gaze of the rule, which should be patrimony of politics, with the rule of the gaze, which should be patrimony of poetry (Franco Arminio).

2. Urban regeneration

Within cities, even the most efficient and modern ones, wealthy districts coexist with suburbs and places of authentic unease, real hidden cities marked by extreme marginalisation and poverty. Based on DPCoe-NUVAP data (2017), about 35% of the inhabitants of Italy’s major cities live in areas affected by multiple forms (at times very marked) of socio-economic distress, and poor quality of life, environment and services. Wide gaps exist between the metropolitan cities of Northern and Southern Italy, respectively - e.g., local public transport services in Northern cities are 3 times higher than the average level provided in Southern cities; absolute and relative poverty of households in

69 main metropolitan cities is 34.4% in Southern Italy, against 9.5% in the Centre and 12.4% in the North, respectively (lSTAT data). As acknowledged by the European Commission, cohesion policy must address poverty-related challenges in cities, concentrating its effort on peripheries and support to most vulnerable populations. In Italy, a first strategic response was provided by the "PON Metro" experience. Positive and innovative results were recorded in the 14 cities involved, from North to South, including: (i) pilot interventions involving several municipalities in the metropolitan areas involved (also identified on a functional basis), within digital services and social sectors; (ii) positive impact on local administrations' organisation; (iii) networking between cities, enabling metropolitan capitals to consolidate useful managerial and strategic skills for territorial governance, also outside the Operational Programme; and (iv) widespread learning of relevant administrative practices, confirmed by the growing spending performance in recent years. Therefore, the "PON Metro" budget (addressed to its 14 cities) proves worth being confirmed and strengthened within the 2021-2027 period, to address environmental issues more soundly, with adequate investments and, whereby feasible, with more effective concentration of interventions in suburbs and marginal areas of cities and metropolitan areas, also through social innovation and support to start-ups. The positive experience generated by "PON Metro" suggests the opportunity to support further targeted action within the 2021-2027 cycle, to improve quality of life in suburbs and marginal areas in other Southern cities (not only metropolitan cities but also medium-sized cities11) affected by social distress, physical degradation, lack of services and, at times, widespread illegality. Also progress made within very limited areas, identified through objective criteria (greater targeting on the "maps of distress"; focus on cities’ peripheries, marginal areas, vulnerable groups) prove that transformations are possible even within very difficult contexts, by bringing together interventions on structures, services and other intangible initiatives, also through co-project designing with the third sector and a social innovation approach. Furthermore, cohesion policy can improve the lives of citizens living in urban contexts through recovery and redevelopment of historic centres or sections of degraded districts. In this regard, four interventions are planned in collaboration with MIBACT, to be implemented in the historic centres of Naples, Cosenza, Taranto, and Palermo, through institutional development contracts (so-called CIS): reactivation of the operational tool; establishment of the institutional committee; appointment of the "Responsabile Unico del Contratto" (sole contract manager); action-plan definition; and identification of implementing actors.

11 In the shorter term, while "PON METRO" 2014-2020 implementation is still ongoing, a first pilot action will be started with FSC resources on "other peripheries" in the South, in order to test and develop intervention models and tools. 70 The regeneration of urban contexts follows two specific main directions: - Ecological transition of cities, which will be measured in the first place with the opening of the so-called “Cantiere Taranto” - an extraordinary plan for Taranto, also through: reactivation of the relevant institutional development contact (“CIS Taranto"), endowed with more effective governance; and implementation of the initiatives provided for by the "Decreto Taranto" (i.e., Taranto Decree) (see relevant Box); - Artistic and cultural heritage enhancement, and promotion of culture-oriented integrated development strategies. The successful experience of "Matera 2019 - European Capital of Culture" is going to activate new actions to strengthen its legacy, also through interventions in the context of an ad-hoc institutional development contract (i.e. a "CIS Matera).

The two actions above show significant synergies and several points of contact. They both provide an opportunity to implement ad-hoc pilot actions which, based on the results achieved, may possibly be extended to other Southern cities. More generally, the method-related innovations of the 2030 Plan for Southern Italy and its renewed attention to the integrated urban dimension of development will also rely upon boosting and acceleration of interventions envisaged within the "Pacts for development of metropolitan cities in Southern Italy". Over the months several remodulations were carried out in agreement with local authorities, in particular for the City of Palermo (social infrastructure strengthening) and the City of Naples, also financing Scampia redevelopment action (after the demolition of the "Vele" social housing neighbourhood), with partial coverage of the "Restart Scampia" reconstruction and regeneration project. The urge to re-launch Bagnoli falls within this priority direction for urban regeneration - i.e., speeding up reclamation operations, and setting up the participatory debate (based upon active partnership) on the results of the international call for ideas launched by Invitalia. Culture plays a leading role in cities rehabilitation and development, above all aggregation and social integration opportunities for young people, and new employment opportunities throughout the creativity supply chain. MIBACT action in this domain encompasses recovery of places, and benefit and production of culture in Southern urban areas, starting from archives and civic libraries, theatres, and music conservatories as well as support for youth orchestras. Cities can become "factories of creativity" - e.g., through targeted interventions for recovery and infrastructuring of unused publicly-owned urban complexes, also attracting artists to settle there. The interventions and implementation methods for these lines of action are identified by MIBACT in partnership with southern territories, through agreements with local authorities and, whereby possible, through institutional development contracts (CIS).

3. Territorial continuity and insularity

The key fracture of the Italian territory stems from insularity, namely from the general disadvantage condition affecting the two major Islands (Sicily and Sardinia), as well as smaller ones.

71 Insularity does not only impact on citizens' access to islands; it also affects the industrial system, as well as internal connections attractiveness for tourist flows, and quality and dissemination of public services. Insularity increases the typical gaps impacting on southern inhabitants’ quality of life and exacerbates depopulation dynamics. Hence, policies that acknowledge the overall disadvantages of insularity are essential axes for strengthening the economic, social and territorial cohesion of the European Union, which pays special attention to island regions (Article 174 TFEU). It is essential that development and cohesion policies address territorial continuity to reduce the costs of insularity for citizens, and at the same time initiate actions to support the economy of islands and promote their material and immaterial connectivity. This involves implementing constitutional values, requiring interaction between ordinary policies and European and national cohesion policy. In 2016, an ad-hoc resolution embodying the opinion of the on insularity was approved. The Resolution calls for "exploiting all possible synergies between European Structural and lnvestment (ESI) funds and other Union instruments, in order to offset the permanent handicaps of islands and improve their situation in terms of economic growth, job creation and sustainable development", as well as presenting a White Paper on the development of island regions, in order to establish a "Union Strategic Framework for Islands" and an "islands desk" within the European Commission. That path has basically stopped and must now be re-launched. Within the 2030 Plan for Southern Italy, and within the 2021-2027 programming cycle, specific attention will be devoted to developing an agenda for islands, through financial reserves and additional allocations. Dialogue with European institutions will be launched by the relevant levels of government, to allow European and national cohesion policy, on the one hand, to neutralise the additional costs imposed by insularity (for resident and non-resident citizens, in terms of territorial continuity, and for the competitive capacity of agricultural, manufacturing, and entire tourism supply chain); and, on the other, to promote the role of islands (by capitalising on their environmental and cultural heritage) in pursuing sustainable development, also with reference to the European Green Deal (and the Just Transition Fund).

4. Flagship projects. A vision of Southern Italy in 2030

Close, recognisable, transformative - These are the features of "flagship projects" that express the vision underlying the 2030 Plan for Southern Italy. Close, as they are aimed at bringing cohesion policy closer to citizens’ life in their own places. Recognisable, to make their impacts more visible and longer lasting. Transformative, to recover dismissed spaces and activate social innovation processes. "Flagship projects" are cultural challenges in which citizens, and in particular young people, can identify themselves. For the "right to stay" to become reality, long-lasting projects are required to give shape to change. We do not need start from scratch, though. The "Great Pompeii Project" (a.k.a. Major Project Pompeii) is precious legacy, as it showed our ability to carry out a complex project in the Mezzogiorno region. The Pompeii Project has provided us with some good practices, which form the backbone of future "flagship projects": presence of an implementation committee, with representatives from EU institutions and the European Investment Bank (EIB); constant institutional

72 monitoring of the subjects involved; negotiating of precise commitments to be verified; an action plan managed and monitored by a dedicated structure. Starting from this very experience, some symbolic projects will be identified in Southern Regions through 2020 - real project-design "challenges" that will support the five missions and the transversal initiatives envisaged by the 2030 Plan for Southern Italy. MIBACT has identified three major opportunities for recovery, creation and enhancement of artistic and cultural centres, promoting territories’ development and tourist attraction. The first opportunity relates to the re-launch of the UNESCO world heritage sites of Pompeii, Herculaneum and Torre Annunziata, a "flagship project" (ideal follow-up to the Great Pompeii Project) enhancing the former Real Fabbrica d’Armi (Royal Weapons Factory, now Spolettificio) of Torre Annunziata, and the archaeological site of Oplontis, whose tourist use will be enhanced. The former Royal Weapons Factory will be managed by the Pompeii Archaeological Park, and will host restoration workshops, as well as an exhibition area. The re-launch action will be completed by finally taking Villa Favorita in Herculaneum from degradation. Villa Favorita (one of the prestigious Vesuvian villas of the so-called "Golden Mile") will then host an archaeology specialisation school. Calabria's attractiveness for international cultural and tourist itineraries can be enhanced by means of a project on the Archaeological Park of Sybaris and the National Archaeological Museum of Sibaritide, to make Sybaris the core of a cultural itinerary across . The interventions carried out in the region during the previous programming cycle will be complemented with actions aimed at solving or mitigating current interference with the SS 106 (State Road 106). The aim is to recover MIBACT farms located within the Park and, above all, give life to a new storytelling on the region, starting from archaeological stratifications and partial overlaps in the city, being both a Magna Graecia and a Roman city. The construction of a Mediterranean Aquarium in Taranto is part of the investments of the so- called "Cantiere Taranto" - an extraordinary plan for Taranto, which aim to provide the city with a new cultural and tourist identity, through recovery of its historic centre, construction of the Circummarpiccolo tourist railway, enhancement of the Archaeological Museum, and establishment of the Superintendence of the Sea. The Aquarium, which will bring to Taranto the scientific and technological experiences that have guaranteed 's success, could be based in the area of the maritime military headquarters overlooking the Mar Piccolo, also through recovery of the Arsenal. In addition, two further "flagship projects" will be made available to public debate; dedicated international calls for ideas will be launched (following the example of the competition launched by Invitalia to re-launch Bagnoli) to identify their implementation location and mobilise the best creative and project-design energies. The first project, to be carried out in Palermo, is known as “NO-MA” (NO MAfia) Museum. It will provide a cultural space on the role of institutional, political and social anti-mafia action, recollecting mafia martyrs, and recalling the civil-democratic commitment of the anti-mafia movements that enabled Italy to develop internationally recognised regulatory instruments. The NO-MA Museum should become an aggregation centre for anti-mafia initiatives and relevant organisations throughout the Country, to face the challenges and evolutionary strategies related to the fight against mafias. Another project, “Food for Life”, will be dedicated to research and technology transfer within the agri-industrial chain, which plays a strategic role in the Mezzogiorno region. Its activity could focus

73 on five major areas: biotechnology for new crops; sustainable agricultural production and biodiversity protection; new millennium food; healthy food for better and longer life; technologies for food conservation and packaging. The project will firstly establish a special coordination committee, aiming to enhance research institutes and private entities active in the agri-industrial field, and create a network with other Euro-Mediterranean centres. In the coming months, all Mezzogiorno Regions will be allowed to present their own proposals as to other "flagship projects". International calls for ideas will be launched for all the projects, financed through FSC 2020 reprogramming, and 2021-2027 resources.

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VIII. Partnerships. Joining “2030 Southern Italy”

1. A Network of Talents for Southern Italy

Over the last fifteen years, the Mezzogiorno area has lost more than 600 thousand young people, more than 240 thousand graduates, who add up to the extraordinary Italian communities worldwide. Despite such huge dispersion of growth assets, Southern Regions’ development shall not be considered as a lost cause. Numerous southern emigrants are waiting to receive an opportunity to provide Southern Italy with the wealth of knowledge and experience they have acquired within different national, European and international contexts, often maintaining a thick network of relationships with their places of origin. An alliance must be built between the people that currently live in Southern Italy and those who already left if. The key lies in creating both institutional and informal opportunities to interconnect the people who have emigrated (who then learned to live within new contexts) and those who produce innovation in the Mezzogiorno region and are familiar with its current realities. As often highlighted, the new emigration phenomena weaken the origin territories, and even fail to ensure the precious contribution deriving from the financial remittances that used to be performed in other historical periods. Yet, new digital technologies would allow for even more precious "returns", namely "knowledge remittances” and "know-how remittances". The 2030 Plan for Southern Italy aims to promote the creation of a "Network of Talents for Southern Italy", to disseminate experiences, knowledge and good practices, above all within public and private management and innovation processes. The "Network of Talents for Southern Italy" will encourage: transfer of knowledge and good practices, exploiting the advantages offered by telematic and digital networks; dissemination of a culture based upon innovation policies and new technological entrepreneurship; support for young people who either wish to stay in Southern Italy or return to Southern Italy to create startups or work within research hubs; "talents" entry into innovative enterprise/business partnerships.

75 The short-term goal lies in building a digital platform that enables administrations, enterprises and citizens engaged in innovation projects in the Mezzogiorno area to pose questions to the "talents", either individually or on an institutional basis, on the occasion of periodic meetings and dedicated workshops. In the first half of 2020, a public event will be held and dedicated to Mezzogiorno’s development prospects: the first participants in the network of talents and southern enterprises will be invited via a dedicated call. The meeting will be aimed at setting up a new operational network.

2. The “2030 Southern Italy Observatory”

Development and cohesion policies are by nature aimed at breaking consolidated balances that depress the potentials of people and places, to then trigger virtuous processes for democratic regeneration. Therefore, not only do such policies need a community of operators and subjects acting within public administrations and socio-economic institutions, they must also stimulate active citizenship in its main-actor social role, and enhance the contribution deriving from widespread knowledge of territories, their know-how, talents and culture. Alongside the active partnership method, which will ensure involvement and participation of all stakeholders throughout the implementation of the 2030 Plan for Southern Italy, wider mobilisation of Mezzogiorno’s cultural and intellectual resources proves necessary. Over the years, a community of experts has developed within universities and research centres that have already undertaken the innovative paths of social research and democratic experimentation, identifying development and cohesion perspectives consistent with the missions pursued by the 2030 Plan for Southern Italy. To be truly effective, in short, the 2030 Plan for Southern Italy requires not only undertaking coordinated public actions at each level of government, but also encouraging social "alliances" aimed at development and cohesion. It is necessary to identify places and opportunities for structured dialogue with the community of experts and bearers of knowledge, together with active citizenship organisations. They all are to accompany the 2030 Plan for Southern Italy implementation to publicly scrutinise the results achieved and secure good administration at central and territorial level. Within the 2030 Plan, a “2030 Southern Italy Observatory” (“Osservatorio Sud 2030”) will be established, composed of representatives from active citizenship groups, bearers of knowledge and experts, administrations, and socio-economic parties from all over the national territory. The goal is to create opportunities for dialogue on topics such as: pursuit of development and cohesion missions; updating of intervention strategies; identification of necessary solutions to overcome emerging difficulties; sharing of experiences; and dissemination of good practices.

“Alessandro Leogrande Award”. Social research may turn into commitment and be expressed in a publication that becomes literature and politics in the higher sense of the word. Up until his untimely death in 2017, writer Alessandro Leogrande was a best example thereof, not only to his city (Taranto) but to the whole Mezzogiorno region, placing himself in the wake of the top experts in the socio-economic issues of Southern Italy and great "frontier men" of the last century.

76 The idea is to pay homage, together with Regione Puglia, Salone del Libro and Invitalia, to his memory by establishing the "Alessandro Leogrande Award for the best literary reportage project on social research". The Leogrande Award aims to achieve two basic objectives: stimulate the creation of literary reports on social issues; train young generations on writing, stimulating reflection and focusing on issues and realities that are relevant for territorial cohesion policy and proper functioning of public institutions. The Award will sponsor five literary reportage projects on social research topics, to be selected by a scientific committee chaired by the Minister for Southern Italy and Territorial Cohesion, and composed of one institutional representative from Regione Puglia, Invitalia and Salone del Libro, respectively, and four writers and intellectuals engaged in social research. The best project will then be presented at the Salone del Libro (Book Festival) of . The Award is also addressed to schools. High-school students will be identified in Apulia Region (and subsequently throughout the Country) and trained on reportage focusing on the analysis of a particular aspect or sensitive issue related to their city. As such, besides being trained on writing and cultural elaboration, young generations will have the opportunity to analyse in depth the social issues they experience in their daily life.

3. A participatory path

The 2030 Plan for Southern Italy is the result of a participatory process, based upon a method that has characterised the Government’s action and accompanied the activity of the Minister for Southern Italy and Territorial Cohesion across his institutional visits in all the Regions of the Mezzogiorno area, and not only. The 2030 Plan for Southern Italy was designed in constant coordination with: the President of the Council of Ministers and relevant PCM entities, the bodies directly supporting the Minister for Southern Italy and Territorial Cohesion (i.e., DPCoe and ACT), relevant Ministries and their respective administrative bodies, and State Agencies - all mentioned in the text, reported as “responsible entities” for the actions implemented, or who simply provided their suggestions. Valuable inputs came from the meetings on cohesion and regional development held on 12-13 November 2019 (coordinated by our Permanent Representation to the EU) with the Cabina di Regia composed of Italian members of the European Parliament and with European Commissioners Johannes Hahn, Paolo Gentiloni, Frans Timmermans, and Elisa Ferreira. In particular, DPCoe and ACT are ensuring ongoing dialogue with Commissioner Ferreira’s offices on the programmes being implemented and on definition of the next objectives to pursued. More generally, an extremely important contribution was provided by the coordination activity on the 2021-2027 Multi-Annual Financial Framework negotiations carried out by the Minister for European Affairs (above all, the sensitive table on the New Cohesion Policy). The lines of action set out in the 2030 Plan for Southern Italy were also inspired by exchange of ideas and interaction with regional and local administrations, MPs, parties, social actors and trade unions,

77 enterprises, associations, third sector, active citizenship representatives, study centres, and university and research communities. The missions, actions, intervention lines, and innovative method of the 2030 Plan for Southern Italy are inspired to several policy indications received from the community of experts, on the occasion of meetings held at southern universities, and in particular within the study centres that produced the analyses referred to throughout this text, starting from the main outcomes of the presentation of the “Rapporto SVIMEZ 2019 sull’economia e la società del Mezzogiorno” (SVIMEZ 2019 Report on the economy and society of Southern Italy), on 4 November 2019, also attended by the President of the Council of Ministers. The partnership tables and ad-hoc meetings dedicated to the 2030 Plan for Southern Italy, with representatives from the world of labour and enterprise, both at central and local level, provided multiple indications and programming proposals. In particular, the document titled “Confindustria CGIL CISL UIL per il Mezzogiorno” (dated 14 October 2019) provided an important reference for the policy choices made in the 2030 Plan for Southern Italy. Hints also emerged from visits to individual local enterprises, trade unions and corporate unions representatives, both on specific and general disputes (e.g., conditions of migrant workers in southern agricultural supply chain, on the occasion of the visit to the "ghettos" of Foggia, organised by USB union, 8 November 2019). The national meetings held at the premises of the Minister for Southern Italy and Territorial Cohesion with ANCI and UPI on 22 October 2019 were decisive for devising and defining a policy based upon being “close to places”; other meetings were held with territorial representatives from relevant local administrations. Policy indications emerged within the 22 November 2019 meeting session of the SEZ governing body (a.k.a. Cabina di Regia ZES), in the presence of representatives from Southern Regions and Port Authorities; and on the occasion of meeting sessions of the “Cabina di Regia for Bagnoli” (19 November 2019, and 20 January 2020), when the related reclamation works were formally launched. The meetings and discussions with the “Forum Disuguaglianze Diversità” (within two public initiatives in October 2019, and subsequent meetings with individual participants of the Forum network) provided important indications on policy choices and method innovations, with reference to the general contents of the 2030 Plan for Southern Italy, and in particular on the National Strategy for “Inner Areas”. The visits to some regions involved in the experimentation provided a decisive contribution for the re-launch of the National Strategy for “Inner Areas” (SNAI) - i.e., Basso Sangro (Abruzzo), Sila and Pre-Sila (Calabria), Valmarecchia (Emilia-Romagna), Appennino Emiliano (Emilia-Romagna), Alto Medio Sannio (Molise), Nebrodi (Sicily). Helpful indications for the 2030 Plan for Southern Italy emerged during the meeting with the Conferenza Episcopale Italiana - CEI (Italian Episcopal Conference), in the presence of H.E. Cardinal Gualtiero Bassetti (28 November 2019). In order to fully define the 2030 Plan for Southern Italy, the Minister for Southern Italy and Territorial Cohesion and/or his institutional support bodies held ad-hoc meetings with representatives from numerous institutional subjects and enterprises (public and private) related to the labour, social,

78 cultural and third sectors, and active citizenship organisations. As follows, the relevant list: Associazione Bancaria Italiana (ABI), Associazioni Cristiane Lavoratori Italiani (ACLI), Associazione di Fondazioni e di Casse di Risparmio (ACRI), Associazione Autonomie Locali (ALI), Alleanza Cooperative Italiane, Associazione Marcello De Cecco, ANAC, Anas SpA, ANCE, ANCI, ANPAL, Associazione Ricreativa e Culturale Italiana (ARCI), AREL - Agenzia di Ricerche e Legislazione, Associazione fra le società italiane per azioni (Assonime), Alleanza Italiana per lo Sviluppo Sostenibile (ASviS), Banca d’Italia, Banca Europea per gli Investimenti, Caritas Italiana, Cassa Depositi e Prestiti, Centro per l’Analisi e la Ricerca su Istituzioni e Politica (CARIP, Università di Pisa), Conferenza delle Regioni e Province Autonome, Confederazione Generale Italiana dei Trasporti e della Logistica (Confetra), Confederazione nazionale dell'artigianato e della piccola e media impresa (CNA), Ente nazionale per l'aviazione civile (Enac), Enel, Eni, Ente Nazionale per il Microcredito, Fondo Ambiente Italiano (FAI), Fincantieri, Fondazione per l’Innovazione Urbana, Fondazione Lelio e Lisli Basso, Fondazione Matera-Basilicata 2019, Fondazione Ortygia Business School, Fondazione Ricerca e Imprenditorialità R&I, Fondazione Ugo La Malfa, Fondi Italiani per le Infrastrutture (F2i), Fondo Nazionale Innovazione, Forum Disuguaglianze Diversità, Istituto Nazionale di Fisica Nucleare (INFN), Invitalia, INVALSI, Legambiente, Magnet-Hub Digital Village, Mediocredito Centrale - Banca del Mezzogiorno SpA, Poste Italiane, Ram - Logistica, Infrastrutture e Trasporti SpA, Riabitare l’Italia, Rete Ferroviaria Italiana (RFI), Save the Children, Snam, SVIMEZ, Terna SpA, Upi, Urban@it - Centro nazionale di studi per le politiche urbane, Associazione delle imprese idriche energetiche e ambientali (UTILITALIA), 6,000 Sardine. The participatory path leading to the 2030 Plan for Southern Italy project-design does not stop here; constant involvement of institutional and social actors will be required for implementation and integration with the next European and national programming cycle (2021-2027), alongside the partnership method in a strict sense. The 2030 Plan for Southern Italy should therefore be considered a living document, open to further contributions, revisions and amendments, through a participatory process that will continue over the coming months (on programming and implementation), to be performed both at the premises of national institutions and through the activities implemented in order to be “close to places”.

Box 18. Milestones

As follows, the next steps for the 2030 Plan for Southern Italy implementation, with special reference to the measures already approved within the 2020 Budget Law. More specifically, the formal implementation of the measures laid down in the 2030 Plan for Southern Italy shall be carried out consistently with the following schedule: - By 30 April 2020, upon proposal by the Minister for Southern Italy and Territorial Cohesion, in agreement with the Ministry of Economy and Finance (MEF) and the delegated political Authority for economic policy coordination and programming of public investments of national interest, the DPCM (Decree issued by the President of the Council of Ministers)

laying down the methods for verifying the implementation of the so-called “34% clause” shall be approved;

79 - By 31 March 2020, the Minister for Southern Italy and Territorial Cohesion shall provide CIPE (Inter-ministerial Committee for Economic Planning) with a progress report on the measures laid down in Article 44 of Decree-Law 34/2019, as amended by the 2020 Budget Law, in order to reprogramme and ensure efficient programming, supervision and implementation of the FSC; - By 30 April 2020, ACT shall submit to CIPE, upon proposal of the Minister for Southern Italy and Territorial Cohesion, a development and cohesion plan (PSC) for each administration holding FSC resources, setting out the reclassification of programming tools

relating to FSC 2000-2006, 2007-2013 and 2014-2020 cycles. In order to improve unitary coordination of programming cycles and accelerate their expenditures, the 2020 Budget Law undertook to establish the new development and cohesion plans (PSC) shall cover only the interventions endowed with executive project-design or with initiated award procedures (see above); - Once fully operational, by 31 March each year after 2020, the Minister for Southern Italy and Territorial Cohesion shall present the progress report on PSCs (see above) to CIPE (Inter-ministerial Committee for Economic Planning); - By 31 March 2020, the Decree of the President of the Council of Ministers (DPCM) shall be approved, laying down the implementation methods of the new Fund for social infrastructure investments (see above); - The 2020 Budget Law also provides for approval of the Decree of the President of the Council of Ministers (DPCM) laying down the terms for allocation of the new Fund to support economic, craft and commercial activities. The Fund operates, within the National

Strategy for “Inner Areas”, with a 30-million-euro budget for each year of the 2020-2022 three-year period;

- A further step of paramount importance for the 2030 Plan for Southern Italy will take place by 10 April 2020, with the approval of Italy’s “DEF 2020” (Economic and Financial Document), which lays down the programming and financial quantification of national cohesion policy for 2021-2027; - By 30 June 2020, the Partnership Agreement draft proposal for 2021-2027 will be shared with the European Commission, six months ahead of the start of the programming period.

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81 Essential Bibliography

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82 English translation by Rosetta Epifani.