EU grants €4.7 bn to Italy for sustainable socio-economic recovery

18 / 09 / 2021

By Marwa Nassar - -

The European Commission has granted €4.7 billion to Italy under REACT-EU to support the country’s response to the coronavirus crisis and to contribute to a sustainable socio-economic recovery.

The new funding is the result of the modification of two operational programs from the European Social Fund (ESF) and the Fund for European Aid to the Most Deprived (FEAD).

Italy’s national ESF program “Active employment policies” will receive €4.5 billion to support employment in the areas most affected by the pandemic. The additional funds will help increase the hiring of young people and women, allow workers to participate in training, and support tailor-made services for job seekers. In addition, they will help protect jobs in small businesses in the regions of Abruzzo, Molise, Campania, Puglia, Basilicata, Calabria, Sicily and Sardinia.

Commissioner for Jobs and Social Rights, Nicolas Schmit, said: “The EU continues to support its citizens in overcoming the coronavirus crisis. The new funding for Italy will help create jobs, notably for young people and women, in the regions most in need. Investing in skills is another priority and key in mastering the green and digital transitions. We are also paying close attention to the most vulnerable people in Italy by reinforcing funding for food aid.”

Commissioner for Cohesion and Reforms, Elisa Ferreira, said: “Europe’s regions are at the heart of Europe’s recovery from the pandemic. I am glad that the EU Member States are making use of the EU’s emergency support to fight the pandemic and kick-start a long-term sustainable and inclusive recovery. REACT-EU’s funding will help Italians in the most impacted regions to recover from the crisis and prepare the basis for future-oriented modern economies.”

Under this grant, Italy will use €2.7 billion to reduce taxes paid by employers on social security contributions by 30%. Small businesses in the regions of Abruzzo, Molise, Campania, Puglia, Basilicata, Calabria, Sicily and Sardinia will benefit from this reduction if the worker remains in employment for at least nine months after the period for which the allowance is requested.

Italy will invest €200 million to reduce the social security contribution for employers who, in 2021 and 2022, hire people under the age of 36 with open-ended contracts. This includes the transformation of fixed-term contracts. An additional €37.5 million will be used to support employers who hire women, again offering an incentive by reducing social security contributions.

The ‘New Skills Fund’ will be supported with €1 billion. It combines the need to reduce the consequences on employment of the coronavirus emergency with training of workers. It funds the hours which are not worked (due, for instance, to difficulties of the company) provided they are used by workers to attend training courses.

Italy will also use €500 million to reinforce and modernize the network of public employment services for implementing active labor market policies. As part of this investment, job seekers, especially long-term unemployed, will be able to conclude a tailor-made agreement with job centres, helping them to find employment according to their individual needs and skill-set.

Finally, €81.7 million will support Italian authorities in preparing, managing, controlling and evaluating the new programs.

In addition to new ESF funding, the Italian national FEAD program will receive €190 million to deliver food aid to people in need. The demand for help in accessing sufficient healthy food has grown significantly since the coronavirus crisis started. Around 10,000 partner organizations in Italy will provide more and better food packages to at least 2.5 million people in need, alongside improved social services for the recipients.