The Italian Recovery Fund Must Aid the Problem of NEET’s in the South
As a reminder for the Italian confused and polycentric coalition, the Prime Minister Mario Draghi has lately reiterated the pressure Brussels is putting on Rome to spend efficiently the resources provided from the Recovery Fund. The European Commission reports that Italy will be disbursed €68.9 billion in grants and €122.6 billion in loans under the Recovery and Resilience Facility (RRF), thus being the primary receiver of the economic action undertaken by the EU Commission and Central Bank. The note from the ec.europa sponsored by the EC states that: “this financing will support the implementation of the crucial investment and reform measures outlined in Italy’s recovery and resilience plan. It will play a key role in enabling Italy to emerge stronger from the COVID-19 pandemic.”
The last phrase must be the beginning of our discussion. Italy has two main issues to tackle using the funds provided by Europe to emerge stronger from the pandemic, and the two are naturally interconnected. Firstly, the government must focalize on the socio-economic differences between North and South. Secondly the measures shall aim to invest on youth employment and innovation. Especially the South of Italy has elevated number of NEET’s (Not in education, employment or training between 15-29 year old). To provide a general idea in outer districts of Naples like Scampia or Ponticelli the percentage of NEET is over 30% (Istat, 2021).
The difference between North and South Italy is outdated. In his recent academic publishing professor Gianfranco Viesti delineates its historical and contemporary elements in his “Centri e Periferie” (2021). The Mezzogiorno (Italy’s southern regions) since 1861, year of the unification of Italy, has always followed behind northern regions. In 1911 almost 60% of the inhabitants of the Mezzogiorno were illiterate against the 15% of the “economic” triangle between Lombardia and Piemonte (Viesti, 2021). In his mandate between 1911 and 1914, the Minister of Agriculture and Commerce Francesco Saverio Nitti had commissioned investments in the south to initiate the transition from an agricultural to an industrial workforce. Under Nitti the Ilva of Bagnoli and the Acquedotti Pugliesi were established, pushing intellectuals like Massimilano Doria to state that if the war(s) had not occurred the reduction of the distances between North and South would have likely been drastically reduced. Between 1914-1952, especially under Fascism, the South was relegated to be the agricultural basin of Italy. The North-East and the Center recuperated on the North-West-historically Piemonte was richest region- passing from 98% to 104% of the average Italian pro capita income between 1914 and 1951 (Viesti, 2021). In the same years in the South the numbers decreased from 85% to 61% of the average Italian pro capita. In Basilicata (the region of Matera, European Capital of Culture 2020) the average pro capita income was 46% of Italy’s average.
The investments on the South changed in the years. Between the 50’s and the 60’s the Italian Christian democratic party installed the Cassa del Mezzogiorno, the public effort of encouraging public works and infrastructures for the growth of the South (Barbaglio, 2014). This included projects like the highway between Salerno and Reggio Calabria. The effectiveness of the project is still debatable, especially in terms of understanding the profit that benefitted the local economy given that most of of the revenues would a) return to companies based in North Italy b) fail to create a cyclical economy of further investments. Investments would be finished but not bring future income such as tourism, cultural activities, sport events etc.
The situation of Italy’s South is still today critical under numerous perspectives. Firstly, the lack of integration between regions is problematic. In 2018 the interchange of goods between Veneto and Lombardia (Northern regions) amounted to 31 million tons, and only 5 million tons between Puglia and Campania (Viesti, 2021). Italy’s south lacks especially financial services and high skill labor and laborers. The differences in pro capita income are the result of inferior rates of employment and therefore inferior rates of productivity. A study undertaken in 2018 analyzed that to reach the economic levels of the North the Mezzogiorno needed approximately 3 million employments, and half of these in middle or high skill labors (Viesti, 2021). ISTAT, working on these numbers, hypothesized that the South needed approximately 950.000 workers for qualified jobs in services like: communication, information, transport, financial services etc (2021). To sum the South lacks jobs and workers to fit these jobs, financial services. Furthermore, southern regions fell behind in the export not only compared to the Oriental German Landers but even compared to Greek and Southern Spanish regions. Italy’s Mezzogiorno lacks foreign investments given its inability to adapt to the trends and phenomena of globalization. In the last decade of the 20th century the export of Southern Italian regions grew in materials like clothing, leather, footwear or carpentry (Viesti, 2021). These being predominantly manufacturing sectors were consequently overwhelmed by the “low-cost” competition of global competitors, contributing to the dramatic economic shrink. In the agro-alimentary sector, despite its natural resources, the south, even given to inferior infrastructures, seems stuck into a limbo that is characterized by a systematic inability of producing growth.
These numbers evidently bring to a conclusion: the Recovery Funds need to incentivize schooling and foreign investments in these regions. In the last 20 years the Center-Northern gained approximately 3 million inhabitants whilst Southern regions lost approximately 300.000 inhabitants (Viesti, 2021). In cities like Palermo, Catania or Cagliari only 17-19% of inhabitants between 25-39 years of age obtained a university degree (ISTAT, 2016). For the same range of age Milano, Bologna and Firenze have a percentage between 36 and 37. The levels of 15-29 NEET are the last boring -yet unfortunately salient- data that bring us to our conclusion. According to the numbers of Eurostat the level of NEET’s in Southern Italy is 34.2% and 23.3% in Italy (Salvemini, 2021). This means that in southern regions 1 young person out of 3 is not in the working world, nor in school or university. In the meantime he/she is neither provided of services to train to specialize in sectors to allow the worker to be integrated in the work force in a near future. Individuals are therefore without a job and unprovided of the means to learn and expand one’s skills. This brings consequences such as general discomfort, increase of emigration to rich urban centers (look at Milan) and entrance and expansion of the black market and criminal organizations. The number of NEET’s in Italy is three times the one of Germany, four times the one of the Netherlands and double the EU average (Casadei, 2021). Young Italians are today frequently discouraged to work even due to low level of pay entrance. Between 1977 and 2016 the entry pay level decreased of 30%, therefore incentivizing emigration towards Northern European states rather than Northern European cities like in the 1960’and 1970’s.
The measures of the government to tackle poverty are still the ones promoted by the Conte I government between 2018 and 2019 and focus on a universal income (reddito di cittadinanza) yet being embedded in bureaucratic and political issues that make the access to these funds more difficult. The work of the next ten years will be fundamental. In the prospects of an increasingly digitalized era the scenario of such elevated number of future 30 and 40 year old individuals without jobs or skill to enter the work force may become seriously problematic in the economic, political and social spectrum.
The plans of the Draghi government focalize predominantly on ecological transition (EUR 59.3 billion), digitalization, innovation, and culture (EUR 40.7 billion), research and schooling (EUR 30.9) and infrastructure for sustainable mobility (EUR 25.1 billion) . Furthermore, the renovation of the Public administrations aims at 24.000 new entries, rejuvenating and strengthening the social value of working for ‘the public sector’ (Brunetta, 2021). The present and future governments will nonetheless consistently need to work on economically reuniting the North and the South through investment in schooling in the South, investment in infrastructure (roads, hospitals), and favor the economic, bureaucratic and judicial conditions (like it has been recently tried to be done with the Cartabia Reform that decreases the time of judicial procedures) to favor FDI especially in the South.
Italy is the first receiver of the Recovery Funds. As argued by the European Commissioner for the Economy Paolo Gentiloni (FT, 2021), the quality and ability of the Draghi government to reform Italy’s conditions will be crucial for the EU to prove its pivotal role in the reconstruction of a post-pandemic Europe. The increasingly stronger transition to a fiscal union, and the relevance of the EU programs could not afford to fails its first and arguably most important battle: the application of the Recovery Funds. An eventual failure of growth of the Southern region may relegate the Mezzogiorno to be the tail light of Europe, and thus sanction the failure of the implementation of almost 1/3 of the Next Generation EU funds. Draghi and Gentiloni are aware that neither Rome nor Brussels could afford such a scenario, and know that in some way the future of the EU passes by the south of Italy.
References:
Francesco Barbagallo. “DI VITTORIO, LA CGIL, IL PCI TRA PIANO DEL LAVORO E CASSA PER IL MEZZOGIORNO.” Studi Storici, vol. 55, no. 4, 2014, pp. 801–818.
“Al Sud Si NASCE Già NEET.” Europarl.europa.eu, www.europarl.europa.eu/doceo/document/E-8-2018-003564_IT.html.
ai minimi da, Dipendenti. “Brunetta Scuote La Pa: ‘Carriere Più Premianti per SFRUTTARE Il Recovery.’” Il Sole 24 ORE, www.ilsole24ore.com/art/brunetta-scuote-pa-carriere-piu-premianti-sfruttare-recovery-AEMMRXa.
Viesti, Gianfranco. Centri E PERIFERIE: Europa, Italia, Mezzogiorno Dal XX AL XXI SECOLO. Editori Laterza, 2021.
“EU Economy Chief URGES End to ‘Muddling through’ with Budget Rules.” Become an FT Subscriber to Read | Financial Times, Financial Times, 29 July 2021, www.ft.com/content/f2d7fc03-aad9-4297-9443-129ada32b74e.
Casadei, Cristina. Due Milioni Di Giovani Fuori Da Studio e Lavoro: Il Triplo Della Germania . Il Sole 24 Ore, 4 Aug. 2021.
