The public debate linked to European funds is often the victim of a simplified narrative, which is summed up in one question: how much does Brussels cost us? It is a vision that reduces the relationship between Italy and the European Union to a mere accounting calculation – “do we give more money than we receive?” – which however ignores the complexity of the structural benefits that derive from belonging to the largest integrated market in the world and the indirect returns in private investments.
In short, being net contributors or recipients of European funds is only a small part of the macroeconomic reality in which we are immersed. And Italy itself, fluctuating a lot between these two conditions in recent years, demonstrates this.
Not only does cohesion policy push less developed regions towards greater integration, but, for an economy characterized by a strong manufacturing and export vocation, EU funds also intended for other countries can act as a multiplier of opportunities.
Is Italy really incapable of spending European funds?
The weight of the Italian contribution
Before any reasoning, let’s answer the question about Italy’s financial position by analyzing the Multiannual Financial Framework (MFF), i.e. the long-term budget of the European Union.
For the 2021-2027 cycle the budget amounts to approximately 1,200 billion euros, equal to 1 percent of the Union’s overall GDP.
Italy was initially a net contributor, meaning it paid in more than it took in from Brussels – an average difference of 3.5 billion euros per year. This is 0.2 percent of national GDP and approximately 0.4 percent of total public spending. However, everything changed with Next Generation EU and the introduction of National Recovery and Resilience Plans (NRPs) for post-Covid economic and social recovery.
Through the Recovery and Resilience Facility, i.e. the main financial instrument of the Next Generation EU programme, Italy has become the main beneficiary in absolute value of European funds, with a total budget exceeding 200 billion euros between non-repayable grants and subsidized loans.
In this way the financial relationship was reversed, making our country temporarily a net recipient of funds from Brussels.
The Pnrr guarantees 191.5 billion euros – aimed at structural reforms and massive investments in the green and digital transition – and is supporting the growth of the national GDP. The challenge has shifted to the level of administrative capacity, however try to put resources on the ground before the post-Covid recovery plan expires.
Because in August this year the temporary fund will come to an end and, once again, the financial relationship will be reversed, causing Italy to return to being a net contributor to the EU budget.
Multiply the opportunities
Given Italy’s ‘swinging’ position in relation to the common budget, analyzing the data without considering the indirect benefits of European economic policies represents an absolutely partial vision of the situation.
This is because cohesion policy – and more generally the financial architecture of the European Union – is the real fuel of a manufacturing and interconnected economy like the Italian one, regardless of the share of direct contributions.
One of the pillars of economic success linked to integration is represented by the effects of spilloveri.e. the economic impacts that investments made in a beneficiary country generate in favor of other member states.
In other words, the orders that are generated through financing and co-financing from Brussels in a member country of the Union can be won by Italian companies, leading to indirect but tangible economic benefits also in Italy.
A greater turnover for companies means not only more jobs created, but above all greater tax revenue collected at a national level.
There ninth cohesion report published by the European Commission shows that approximately 15 percent of the total impact of cohesion policy on the Union’s GDP derives precisely from international exchanges between member countries. For industrialized countries like Italy, over 45 percent of the benefits deriving from European cohesion are generated indirectly by investments made elsewhere.
When Brussels finances the construction of a motorway in Poland or the modernization of the railway network in Romania, a significant part of that spending turns into orders for companies providing machinery, technological systems and engineering services.
The Joint Research Center (JRC) esteem that for every euro invested in cohesion between 2014 and 2027, the total economic return by 2043 will be almost three times the initial investment.
Beyond the contributions allocated at a common level, therefore, European cohesion acts as an indirect industrial policy that strengthens European value chains and allows Italian companies to participate in economies of scale that would otherwise be unattainable.
Innovation and green transition: this is how cohesion policy supported the development of Northern Italy
From Italy to abroad, and back
One of the most concrete examples of how Rome’s contributions to Brussels return to the country in the form of real wealth is the massive presence of Italian companies in large infrastructure contracts financed by European structural funds in Eastern Europe.
For over fifteen years Italy has been the main investor in Romania by number of registered companies, particularly in the construction, energy and transport sectors.
The European financing provided in Bucharest is transformed into contracts worth billions of euros for the multinational Italian companies that are leaders in these sectors.
Emblematic examples include Webuild, which leads consortia for the construction of Lot 3 of the Sibiu-Pitești motorway – a project worth more than 1 billion euros financed 85 percent by European funds – and the Pizzarotti Group, which has been awarded contracts for the A7 motorway in Romania.
Saipem has obtained offshore energy infrastructure contracts between Romania and Germany for a total of 1.8 billion euros, while Salcef is actively involved in the rehabilitation of strategic railway lines.
These projects not only guarantee capital flows to the headquarters, but with their orders they feed a supply chain of thousands of small and medium-sized subcontracting companies, which constitute the backbone of the manufacturing sector, especially in Northern and Central Italy.
The export engine
It is precisely this factor of cascading benefits of European policies – first and foremost that of cohesion – that highlights the true engine of economic growth in member countries, whether they are net recipients or contributors to the common budget: access to the EU Internal Market.
A single market of 450 million consumers and 26 million businesses represents the main economic benefit of belonging to the Union, guaranteeing the free movement of goods, capital, services and people, eliminating tariff barriers and harmonizing technical standards. A benefit that far exceeds the cost of any net contribution.
Studies conducted by the European Central Bank (ECB) indicate that trade integration increased the GDP per capita of the founding countries – Italy, France, Germany, Belgium, the Netherlands and Luxembourg – by between 12 and 22 percent between 1993 and 2014. Translated into terms of average wealth, it means an annual earnings of around 840 euros for each Italian citizen.
In 2023, Italian exports of goods, such as industrial machinery or agri-food, they achieved a value equal to 626 billion euros, of which over half is intended for European partners. Comparing an accounting deficit of 3/4 billion euros with such a volume of exports to the EU makes clear the disproportion of a rhetoric that focuses attention on “how much it costs us” belonging to the Union.
It can also be seen this way: the contribution to the budget is the membership fee necessary to access an economic ecosystem that is worth a hundred times as much.
