Italy, NRRP, and Industrial Policy

This chapter assesses the National Recovery and Resilience Plan (NRRP) as an industrial policy tool within the Next Generation EU framework, despite limited explicit reference to an industrial strategy. The NRRP emerges during a unique moment for the European Union (EU), characterized by the suspension of the Stability and Growth Pact and the relaxation of state aid restrictions, which have collectively expanded public intervention opportunities. This marks a significant shift from the post-1990s ideological emphasis on competition over state involvement, particularly in Italy, where reductions in capital expenditure since 2009 have constrained public infrastructure and private investment. This chapter delves into the current landscape highlighting the potential for a more effective approach to industrial strategy using public investment. By focusing on “Mission 1” (Competitiveness) and “Mission 4” (Education and Research), the chapter aims to elucidate the NRRP’s industrial policy direction including reinforcing the special economic zones (SEZs) established in 2017.