TITO MICHELE BOERI

Policy Brief 55

Copertura mediatica:
Frankfurter Allgemeine Zeitung, 19/02/2026

EU Money Pit Italy? By Christian Schubert, Rome

"A new country is being created" through the European recovery plan in Italy. So reads the government website "Italia domani" about the massive investment program the European Union launched during the pandemic. The program, also called "Next Generation EU" (NGEU), is meant to drive modernization across Europe — from railways to energy, culture to tourism, research and education to healthcare. Digitalization and social inclusion are overarching goals.

The plan is financed through joint European debt, making it relevant to the current Eurobonds debate. Italy is under particular scrutiny: no other country has received as much from the EU's pot of over 720 billion euros — more than 153 billion euros between mid-2021 and end-2025. By August, the total should reach around 194 billion euros, of which more than 70 billion are grants and the rest cheap loans. Italy is a test case not only for its own government but also for the EU Commission, which envisions similar projects in the future.

Now two renowned economists from Milan's Bocconi University are delivering a sharp verdict on the recovery plan. Tito Boeri, head of the economics department, and his colleague Roberto Perotti present in a previously unpublished 32-page paper that the NGEU program has barely moved Italy forward. The Italian administration was simply overwhelmed by the volume of money to be spent wisely. "As a result of these failures, Italy risks ending up even more indebted than before, without having addressed its structural weaknesses," is their conclusion. "Reforms were not carried out. Most programs were only partially implemented." Successive Italian governments treated the recovery plan more as "a race to spend rather than a development strategy." There was never any coherent approach.

Goals had to be scaled back repeatedly. A lack of transparency is a huge problem, the authors emphasize — which partially weakens their damning verdict, since without precise insight they cannot be certain that nearly everything went wrong. According to the Italian government, the money flowed into around 300,000 projects — "it is virtually impossible to verify the government's claims," the authors write.

Where they do get specific, however, they make weighty arguments. During the recovery plan's runtime since 2021, for example, the number of resolved court cases fell rather than rose — even though improving the efficiency of Italy's notoriously weak justice system was an explicit goal. Even the extremely expensive Italian housing renovation program "Superbonus," costing 165 billion euros, received 14 billion euros in NGEU funding and was later indirectly facilitated by it, despite showing little broad impact. In the education sector, government decrees were delayed until last March due to disputes between ministries and universities. "The goal of hiring and paying staff on merit criteria was missed due to resistance from politics and trade unions." Questions also arise about funding for digital transformation, "since most Italian schools already have WiFi, digital registers, and interactive whiteboards."

In the construction of kindergartens — meant to ease Italy's demographic crisis — many municipalities were hesitant due to fears of high ongoing costs after the program ends. Together with the EU, Italy has therefore more than halved its target for newly created childcare places. Price increases were also striking: the original cost of 17,400 euros per place later rose to 30,400 euros. The authors are equally critical of new student dormitory construction and the reform of employment agencies.

The economists also spare no criticism for European institutions. "Surprisingly, the European Parliament has so far exerted little pressure to increase transparency." And: "The Commission should have pushed for more realistic economic forecasts" and "warned the Italian government of the risk of taking on so much money at once."

These are not just any economists: Tito Boeri was formerly president of Italy's social security agency INPS, taught at the London School of Economics, and worked as an economist at the OECD. Boeri is not part of a radically free-market school of thought — he is often associated with Italy's center-left. His colleague Roberto Perotti is also a long-standing economics professor at Bocconi and previously worked in the United States. One of their key criticisms concerns the tight timeline: the money must be spent by August 2026, a deadline pushed for especially by the German government, which did not want the program to become permanent. This led, according to Boeri, to "excessive haste."

In Italy, the critical report has met with little enthusiasm. Economist Francesco Giavazzi, who is close to Mario Draghi, says he is "fundamentally of a different opinion." The same message comes from the office of Tommaso Foti, the minister responsible for the recovery plan. One criticism of the criticism is that Boeri and Perotti ignore the positive effects of investments in rail and healthcare. In justice, for example, a whole new "culture of time awareness" has taken hold, which could shorten the notoriously lengthy proceedings.

At a conference in Brussels in January, economists from the European Central Bank and the IMF pointed out that the plan, as a rapid EU response during the pandemic, generated considerable international trust, underscoring the solidarity of member states and the capacity of politics to act. Bond yields fell after the announcement. "We saw entirely new structural reforms that raise the productivity and resilience of economies," said Alfred Kammer, head of the IMF's Europe department. This also helped member states better cope with later crises following Russia's invasion of Ukraine. Estimates of the plan's growth-promoting effects vary. The IMF believes EU countries' growth rose by around 0.25 percentage points annually between 2021 and 2024. Most economists agree that the structural effects of the plan can only be assessed in a few years' time.

• An Evaluation of the Italian National Recovery and Resilience Plan (776 Kb - english version)

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