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You are here: Home > Citizen Audit > Another step ahead/03 2021-05-11 #Italy #Government #COVID19 #NextGenerationEU

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Published on 2021-05-11 16:40:00 | words: 5136

On April 30th, it was official that also Italy had released to Brussels its own proposal for the allocation of funds associated with the measures summarized as #NextGenerationEU.

This article is the third of a series:
_01 2021-02-19
_02 2021-04-29.

But, actually, it could also be seen as a point of convergence with another thread that started in late April 2021:
_A visual journey: from #NextGenerationEU to #PNRR (piano nazionale ripresa e resilienza) to #NextGenerationItalia - part 1.

Incidentally: and the part 2? When there will be a further step, i.e. will be finalized also in Brussels, and then the latest addition of 2500 pages will be "embedded" (more about those pages later in this article).

You can follow online my reporting on the "stage gates" of the Italian PNRR, within a "log on the evolution" that created on Github (following the approach that I described in June 2020 within Law&Versioning in #Italy - an experiment in #swarm #democracy).

Now, back to this (short) article, that will be divided in few sections:
_the structural and cultural dimension of #NextGenerationEU
_real estate as a systemic mine canary
_using data and using brains

The structural and cultural dimension of #NextGenerationEU

I know that you would expect the usual "tag clouds", but this time I will have to disappoint you.

While waiting for the next step from Brussels, I would like to do what I did in April 2020, when I shared a dataset containing a selection of indicators from the World Bank.

Back then, as an example, within the associated presentation Jupyter Notebook, for a couple of examples on GDP and level of urbanization, compared four countries: France, Germany, Italy, Spain.

The concept is: there are structural and cultural differences between EU Member States.

Retaining the latter while reducing the former is supposedly one of the objectives- as the diversity of European cultures is both part of our heritage and an element that supported our continuous social, economic, technological innovation.

We are celebrating almost 71 years of peace in Europe (I consider the starting date of the negotiation, 21 June 1950).

Nonetheless, we forget that most of those years were "frozen" due to events outside our control, at least until the late 1980s.

Then, we entered into a decades long "transition toward a convergence" that it is still far from being completed (have a look at the KPI dataset I referred to above, contains few decades of KPIs values across EU 27).

Actually, the longer the transition went, also without the reassessment due to COVID19, changes were that the signposts of the path (and the form and shape of the destination) would change.

The Cold War was an element of forced cohesion, but also blocked organic development- European integration or, at least, convergence played second fiddle to other exogenous priorities.

Maybe it was not such a bad thing, if you consider that Europe had centuries of "organic development" that resulted in internecine wars: imagine what could have happened if we had had a direct continuation (excluding all the wars in-between) since Charlemagne.

Yes, well before the "Monnet" change by crises, in reality we had centuries of the same: from the Fall of the (Western) Roman Empire, to the crumbling and fractioning and then re-assembling (under Charlemagne), and then partitioning (to say nothing about economic crises, the folly of Crusades, or the Black Plague), etc.

Each crisis generated then a restructuring.

But, as I as told decades ago in Italia, "la storia non si fa con i se ed i ma"- buts and ifs do not define history, albeit could help in define choices for future "organic institutional development", possibly moving toward something more democratic (i.e. more organic) than our routine (since post-WWII): "give me a crisis, and it is an opportunity to do what would not have political support in quieter times".

The "package" embedded within and surrounding the #NextGenerationEU aims to something more than a mere "back in business"- the idea is to increase convergence.

If you visit the website of the European Commission, and look at the page showing which EU Member State did deliver what, if would seem that most have already delivered (I visited the page first on 2021-05-06, and again on 2021-05-09).

Then, if you were to follow each link, you would actually see how the picture is more nuanced.

As an example, Sweden, in its own linked website, states that a decision was made to use the possibility of extending the delivery time, in order to prepare a better proposal (with an undisclosed bonus: watching what other did, and reactions associated with each proposal).

Glad that they released it in English- my Swedish reading skills are really rusty, and were never that much to begin with... as my university summer academy in 1994 luckily was in English.

Other countries made a similar choice, i.e. to postpone, but in their own language- so, it takes some effort to understand it.

So, when the national plans will have been negotiated, tuned, bartered, and then receive a consensus from the EU 27, it might well be that I will add a new dataset comparing and visualizing choices and patterns across at least those four countries.

For the time being, I would like to start by sharing a tally of what was provided by the four countries up to 2021-05-06:
_France provided an 815 pages document
_Germany provided a web page with 15 documents for a total of 1,241 pages
_Italy provided the same 269 pages that I commented in previous articles
_Spain provided a web page with 38 documents (30 released on 2021-05-05) for a total of 2662 pages.

Why did I wait few further days? To see the evolutions- e.g. Italian newspapers few days ago reported that Italy added 2,500 pages of details on the projects, akin to the 30 files released on 2021-05-05 by Spain.

The concept?

As I shared in previous articles, some countries (including Italy) started on the wrong foot at the turn of the century.

And, while I was living and working abroad and once in a while dropping by, I saw that actually already as early as 2001 Italy prepared to enter the Euro... exhausted.

The above mentioned list of documents and pages was to show something: also countries that decided to ask for much less than their share of the "package", released something more structured that the "long outlines" that initially Italy and Spain released.

First Spain on the 5th, then Italy, added more "depth".

Somebody in Italy would say that I am critical as it is well known my list of complaints with Italy since at least mid-2000s.

But, frankly, if it were really so, I would simply ignore it: you monitor and study what you hope that could be improved.

When I was living in Brussels, somebody claimed I had access to inside information, due to my commentary pinpointing ahead of time what was then announced: I just connected the dots, courtesy of my political and business experience from the 1980s, interacting with senior managers in various industries.

Right know, if I had been an insider on the PNRR definition, I would probably have been able to pinpoint to specific critical points, as I did on the (publicly released, but read by few) Law that converted in 2020 a government decree into a law, and had some quixotic lack of synchronism between action, structures, and, surprise surprise, allocation of resources (you can have a look at the "timeframe" here).

My focus on the Piano Nazionale di Ripresa e Resilienza (see my documentation and logging project website) is about a simple issue.

As I shared already last year, and recently has been confirmed by much more qualified sources, this COVID19 crisis is going to generate for Italy additional debt on the tune of probably 500bln or more, i.e. adding 20% in a couple of years.

The "next generation" side of that debt, i.e. increase the ability to do something more than cope with events, and make it sustainable for future generations, is way too often hyped in announces, but lost in hundreds (now thousands) of pages with numbers, projects, allocations, assessment of impacts...

...looking at yesterday or at most today, not tomorrow.

The buzzword "resilience" is overused, also "emergence" and "governance" should get their fair share of attention.

Sustainability is a function of the ability to service (and eventually phase out) the debt while still having resources to make your own choices, not just a matter of volume and "continuity" on choices taken one or two generations before.

Most people look at the expected percentage growth of the GDP.

Frankly, I think that that is not enough: consider that those in my age range (entering the workforce in mid-1980s) already started working with "temporary" contracts (generally, 2 years contracts whose end was to both learn and do, to eventually turn into permanent employment- also if, in my case, first informally at the beginning, then after few months less informally, in reality I was asked to do what was not my formal role and pay grade, and would become my formal role only four year later, when I switched company), and that the "temp" side expanded over the decades.

The "gig economy" was already a reality even within the State administration in Rome in mid-2000s.

The #NextGenerationEU due to COVID19 is a big change, yes, but also big changes show some signs here and there before turn into a "system overhaul".

Real estate as a systemic mine canary

What was a mine canary? A kind of "sensor" used in mines as "early warning system" for gas- you can read the history here.

COVID19 forced a reassessment of what was part of the "quality of life" in Italy, including something that I saw since the late 1980s around Europe as part of "gentrification", and instead had been part of traditional life in Italy well before I was born.

In a country where a large chunk of the population used to pay a mortgage instead of a rent, already few years ago was discussed the issue that most people in their 30s could not be considered a viable customer for a mortgage, with the current "gig-orientation" of the labour market, even for jobs that actually are permanent.

Whenever, since the late 1980s, I met some "temporary consultants" that worked for the same customer in the same office since a decade (or more), but with an annual contract renewal, I saw a distortion.

It was back then, in IT, called "body rental"- and those "permanent temporaries" eventually behaved as employees.

At the turn of the century, those "temporary contracts" started to get shorter and shorter- in IT, it is common now to see 3-6 months contracts, while in other clerical work it eventually became common to have even shorter contracts: a practical impossibility, as the "ramp up" time for a new clerical worker (i.e. to have them as a productive team member) exceeded the initial contract.

Anyway, it is now common, therefore not just in activities where "getting the skills needed here" could take hours or days.

Well, now it is again a point of discussion: a mortgage is a plan that sees an "event horizon" equivalent to a large number of "gig cycles" for way too many in their 20s-30s.

I do not see that really as just an issue of "enabling ownership", but as a matter of "support to the real estate market".

Otherwise, that too would need a redesign.

Ditto for the rental of properties available in urban areas for commercial purpose, e.g. café and shops nearby office blocks.

Visit any major Italian town now, and you will see plenty of closed shops.

COVID19 pushed some companies to reconsider a typical habit of Italian companies, i.e. to have offices and branches not in cheaper locations (as was in Paris with satellite towns), but in the center of towns (and I remember how my French colleagues joked about the Italian companies getting offices in some of the most expensive areas in the centre of Paris, while anybody else went into "satellite" towns).

Many talk about the "quality of life" of Italy, but forget to remember something that, whenever I worked abroad (even in Europe, not just my occasional business visits outside Europe), most got so much used to, that they do not notice anymore.

Yes, in Italy too, manufacturing companies, notably those created post-WWII, were created in empty areas outside towns- but in many cases the town then extended to "absorb" the factory.

Just visit e.g. Milan or Turin, and you can easily spot "when" the town extended, by looking at factory buildings and, often, more recent residential areas surrounding them.

But offices (and associated services, including shops) were still, until 2019, mainly in urban areas, small and large.

I remember once, while negotiating to outsource a service, how part of the "industrial relations" side was actually that employees complained that, by being moved away from the customer site, they would lose access to all the shopping and eating facilities that made enjoyable the lunch break (in Italy, it is usually around 1h, while in some areas in the past could extend to 1.5-2.5h, to allow people to have lunch at home, not the 30mins that I got used to since the late 1980s elsewhere).

Hence, what was introduced with industrialization, areas focused on specific purposes, e.g. just for residential apartmentss within multi-storied buildings, and is closer to what is "normal" elsewhere, in Italian is called "quartiere dormitorio"- i.e. sleeping quarters.

I remember visiting in the early 1990s in Germany urban areas that have been set up in the XX century following some early XX century precepts, and I was told what I was told again in London a decade later.

Those areas had no social meeting places (in Italy, smaller shops, café, etc. were part of that "quality of life"), and generated "alienation": higher truancy rate in schools, more juvenile crimes, etc.

Functional, maybe, i.e. optimizing the use of horizontal and vertical space, but, as we say in Italian "senz'anima", without soul.

I heard in the early 1990s in Germany ideas to bring back shops, squares, gardens, social spaces within those "sleeping quarters", and read routinely in London, while living there, of the issue of similar areas in London, as well as I remember a time when, coming from Brussels to Paris with the Thalys, the train slowed down and, being late, we saw fires in the suburban areas.

If we move toward a different way of working, a different way of living, and a different distribution of time across personal and social life, it will be more than a matter of improving public transportation, adding more bicycles-friendly streets, or giving people access to high-speed Internet and appropriate facilities at home.

Apartment blocks designed as packed sleeping quarters optimizing the allocation of space are not ready for remote working, and certainly those "quartieri dormitorio" would need a redesign to introduce back some elements of the old "quality of life" Italian style, e.g. visit old small villages in Italy: shops and inhabitants weren't "segregated by duty".

Now, the COVID19 push toward remote work made companies reconsider their physical presence in the centre of towns (at least, the amount of space that they will need, and converting it into what I already saw in 1990 in Andersen in Milan, offices on a rotating basis).

This would both free space, and push toward a reconsideration of more recent suburban areas, smaller towns nearby larger towns such as Turin, Rome, Milan, but also (due to costs) Florence and others.

If people will not be seeking to live nearby the office, as they will be there just one or twice a week, some 1950s-1970s developments that currently are used mainly in the evenings and week-ends will look for more local services- yes, also pedestrian areas and café.

But this is just one of the elements, and, unfortunately, in our hyper-specialized and data-obsessed times, it seems that each "team of experts" does a good job a giving a one-sided view of reality, and then focusing on turning the others into loyalists to her/his proposals.

Now that I shared again, indirectly, my usual "think systemically" approach, I can get back to the numbers...

Those 500bln EUR (or more) in additional State debt that Italy could have to finance would have been difficult to sustain before, considering the "gig economy" that had extended also to the State bureaucracy already in the early 2000s.

But if were to be allocated to "keep afloat" current interests would generate a self-fulfilling prophecy.

So, we need a different model.

Using data and using brains

There is a curious element within the architecture of #NextGenerationEU and the associated measures.

Yes, there are some shared "missions" that each Member State should focus on.

Still, the plans presented will be national plans, and it can be expected an overlap of conflicting priorities.

The curious element is this constant "tug of war" (but I like more the "visual" German equivalent, "tauziehen", pulling the rope), between a kind of Gosplan-inclination that was almost a founding element of CECA, the national element, and the attempt to do some EU-wide "synchronized swimming".

Often, the EU visually reminds the last scene of "55 Days in Peking", when each one of the countries resumes playing its own tune.

Looking at the two extremes, the "Gosplan-model" that, say, distributed producing wheels for train coaches to a country, chassis to another, cabin to yet another, to a "survival of the fittest" that would have each country focusing on what they expect could be the most value-added segment.

Both delusional...

...the former, as anybody remembers the stories about factories focused on producing left shoes and others on right shoes, and the ensuing funny and not so funny side-effects. If you want to have a humorous depiction at the time of the "sale of the century", have a look at an old movie that I quoted few times in the past, "Oligarkh" (I found it by chance in a shop in Paris, while looking for the DVD of "Brat", over a decade ago);

...the latter, as was shown during the COVID19 phase, when factories in Germany could re-open, but then discovered that actually their suppliers (all more important in "lean" and JIT times) in Italy were closed.

As I reminded few days ago a friend, when, long ago, in Italy there was a strike of truck drivers, after few days some automakers had to temporarily shutdown, as everybody was used to keep only what was needed, and produce only what was needed (except the smallest entities unable to cope, that "inherited" warehousing on either their own premises, or their customers' premises, to avoid "breaking" the supply chain, but unable to be so fast and flexible).

So, between these two delusional extremes, expect probably presentations along national interests, and then bartering across almost-systemic, EU-wide lines.

It is an element of cultural sensibility, coupled with harmonization.

The interesting element is that, if you just glance at the documents (on Sunday evening a spent a little bit of time browsing across each one of the pages of the documents whose pages I counted above, for those four countries), the "national" (and national politics) element is overbearing in each document.

But it is to be expected: yes, funding will be raised at the EU level, but taxation and payback will still be through national tax authorities and governments.

Hence, a political element in proposals is a natural element.

As for the harmonization side, I would like to share a couple of stories, one from business in the 1980s, another one from an initiatives that started in the early 2000s to support the public sector in Italy- and, as I wrote in the past, shut down due to political interferences that had decided that they would have a majority share (had been invited by... a partner of a partner).

Scenario for the first case: late 1980s, corporate reporting, but across multiple units abroad belonging to a larger company.

The issue was that the rules were created by the HQ for HQ purposes, but then the reporting was to be done by smaller units that actually lacked the resources and skills to provide that level of depth within the information.

Something that I heard again few years ago from Italian manufacturing companies that entered the supply chain of larger, structured foreign customers, and found themselves drowning in bureaucracy.

It is also something that I saw in the 1980s both on practice (Decision Support Systems) and theory (applying my cultural anthropology, archeology, and European regulatory/politics interests to business culture): harmonization done at the centre usually assumes a level of capabilities that is missing in, say, branches or business units that have 1/10th or 1/100th the workforce.

Example: say that compliance requires that those receiving supplies are not those that physically report on the stock of material received (the "controller and controlled" principle).

Well, it as fine a principle as any- but if your local business unit has a quantity of micro point-of-presence logistical support facilities with attached micro-warehouse, where there is just one staff member that is there full-time, the others appear only when needed for a specific project or mission, it is not so easy to comply, unless you are able to organize a perfect synchronized swimming with a set of "rotating roving agents" that travel from place to place whenever a delivery is due, so that the "resident local" is never controlling her/himself.

Now, jump over a decade, to end 1990s, when I started living in London, working in Paris and Zurich, and visiting once in a while Brussels, while occasionally providing information on what was going on.

I saw the same: increasingly, the rules from Brussels were developed with the support of larger and larger teams of advisors, those having a narrower and narrower expertise, and resulting then, by aggregation, into what had to be then implemented by national and local authorities across the EU.

Fine: but, frankly, when writing about e-government and bridging the digital divide, even many of my consulting colleagues who were more "vertically focused" on just one subject could not get through those "suggestions, rules, regulations" without rolling their eyes and looking for other "vertically focused experts".

Imagine a country how Italy, where those cross-disciplinary skills were available only in few administrations.

As an example: when I was in Rome part-time in mid-2000s, there was a tender for the national tourism portal, and I was asked if I would like to help prepare a proposal.

I turned down the opportunity as it was blatant that it was structured in such a way that it was almost a done deal, unless you wanted to really invest.

Then, I saw that for e-government services some assessements were done, resulting in a small sum (I think was 33 or something like than per citizen per year) to be allocated.

Local authorities, not just in small locations, said: and we should deliver all those services with that? So, the reply was: transfer us the budget, and the applications will be developed centrally and then spread around.

I do not know how it evolved, but that was the level of the debate.

So, after another round on other activities, I did my research, aiming to offer a service to help "translate into actionable items" the piles of advices, rules, regulations, whatever that was coming from Brussels, as there were potential benefits.

I saw something interesting, almost a "triaging" across the 8000+ local authorities:
_towns over 800k inhabitants could tentatively had the resources in house (albeit I was later to discover that was not necessarily so), or procure them, due to their budgets
_towns under 50k would be better off by getting a "ready to wear" provided by a national or regional entity (one size fits all, except few parameters), more receiving than choosing
_towns between those two thresholds, i.e. larger than 50k and smaller than 800k, could be a target to provide this "information update" and "decision support".

Well, it was few years after a change within the Italian Constitution to devolve some powers to regional governments, that actually resulted in the creation of local "suppliers" at regional level.

I asked some of my targets, and they told that they would be interested, as this way they could identify what mattered to them, or join forces with others of similar size that were elsewhere, on mutually interesting initiatives, but...

...they could not allocate a penny, as all the relevant budget had been transferred to regional service providers- that were more inclined to optimize by providing them what I had identified as suitable for smaller entities (and some said that, actually, nothing at all was delivered).

Keeping those few examples and concept in mind, how could this impact on the #NextGenerationEU?

I do not know- personally, I would like to see a role for the Committee of the Regions in the "harmonization" phase, i.e. when prioritization hopefully would be defined considering the systemic interest of the whole EU, at least for the "next generation" part.

Maybe I will share something in the future, while observing from outside and "connecting the dots" on the evolution of the negotiation.

For now, I would like to jump this phase, and move forward to the next phases: implementation and monitoring.

I think that the old "PDCA" (Plan-Do-Check-Act) cycle could actually be useful, as I think that we will need a continuous adjustment.

Anyway, if you want to have a continuous adjustment, you need first to define a joint reporting standard.

Maybe a job where Eurostat could help to develop in this first application of a set of principles that, probably, as somebody said, could become permanent.

So, instead of the "command and control", more a:
_define shared guidelines
_identify the "data harmonization" elements (i.e. how the national KPIs will feed into the EU-level)
_continuously exchange information to enable all to adjust if and when needed, at least in the second and further rounds.

If the first funding will be delivered in July and the second in December, maybe the first phase will be useful also to define a first model of reporting, then tune, and have for the second rouund in December something that can provide feed-back continuously.

Why? Because prioritization and projects definitions at this level of complexity and size assume a scenario- and the scenario might change.

So, while allocation in the first phase for the first approved projects will have to deliver a degree of certainty to those on the receiving end, further phases might be subject to adjustments.

Unless somebody assumes that 750bln EUR have to be allocated now, and then the associated plans cast in stone and unchangeable, whatever reality were to dictate.

In my view, we should get used to at least a revision and adjustment every six months, but adjusting one budget cycle down the road (i.e. six months or one year later), if we want to achieve not just efficiency in spending, but also efficacy in producing sensible impacts that would justify the "next generation" part of the name.

As I wrote above, I would like to see also a cross-regional element, to consider for the future more "attractors" that can provide an ecosystem and foster integration.

But, again, I am and will be just an observer.

Let's hope that, this time, and not just in Italy, "planning" will be useful for the conceptual framework it creates, not to generate zealot of "The Plan" that would remind a little bit too much for comfort... the old Gosplan!