The real Impact Recovery Fund: we give up freedom to become … poorer
Yesterday the Prime Minister Draghi presented the PNRR, the application plan of the famous recovery Fund. the tone was, of course, emphatic, and it is not even his responsibility: it is a year that all the media and the distorted bad information, especially television, presents it as the rescue of Italy, but is it really like that?
We take data offered directly by the MEF on the effects of PNRR. The reality is quite different as regards its effects. Here is the summary table.
I want to point out two facts:
- Consumption, which, for the PNRR, is contracted from 2021 to 2023. Since consumption is the expression of citizens' wealth, it is what you buy, eat, drink, travel, the effects of the PNRR are restrictive for at least three years and, in any case, at the end of the period their expansion will be, at best, very limited, only 1.9%.
- At best, GDP will grow, a cumulative effect of 3.6% in six years. But it is the best hypothesis, the worst one is a cumulative effect of 1.8%.
Shakespeare would have said, if it were a play, "Much Ado About Nothing," but, in reality, it is far worse. Not only is it nothing, but it is something that will certainly make Italian citizens feel less well for at least three years. To then have a debt that, in any case and without postponements, will have to be repaid for the next 34 years, when our national public debt is normally renewed and not repaid. Among other things, the EU is preparing to be, among the global economic blocs, the most deflationary one, and this will increase the weight of the recovery fund repayment over time.
So even following the same official data we are faced with a situation that is anything but positive, precisely because of the recovery Fund. It will not be easy, in the next few years, to explain politically that everyone is worse off because we wanted to use this extraordinary tool that makes us all, objectively, poorer.
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The article The Real Impact Recovery Fund: we give up freedom to become… poorer comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/limpatto-recovery-fund-reale-cediamo-la-liberta-per-diventare-piu-poveri/ on Wed, 28 Apr 2021 09:00:23 +0000.