Italy has warned that a severe labor shortage is hampering the country’s ability to implement projects worth billions of euros under the European Union’s post-pandemic recovery plan.
In a report to parliament, the Italian government warned that shortages of skilled workers in construction, IT and engineering – and a lack of competent managers – were causing delays and could “jeopardize the full implementation of the plan”. . Italy is the biggest beneficiary of the EU’s 800 billion euro plan, with grants and loans expected to be worth up to 191.5 billion euros by 2026.
The report comes as Rome has been waiting for months for Brussels to clear its next tranche worth 19 billion euros. It is also an acknowledgment that Roma may face more delays in disbursing more funds.
The recovery plan is seen as a once-in-a-lifetime opportunity to revive Italy’s chronically underperforming economy and boost its long-term growth by financing infrastructure investments such as rail lines, water systems, childcare facilities and clinics.
But at least 20 percent of the projects to be completed by 2026 face constraints such as rising raw material costs, bureaucratic delays, lack of commercial interest or technical shortcomings, Rome said.
The government is now negotiating sweeping reforms with Brussels to make the plan more realistic. Changes to the plan could include pushing back deadlines or cutting projects – letting those deemed strategically important be funded by resources unrelated to such a tight timeline.
“It is inevitable,” the government report said, while affirming that Rome was committed to meeting the plan’s “qualitative and quantitative goals”.
The Bank of Italy estimates that an ambitious investment package will create 375,000 extra jobs in Italy in 2024, with the plan due to be completed in 2026. But Roma said its lack of qualified talent to fill the vacancies could have a “negative impact” on its progress.
With a rapidly aging population, Italy is facing widespread labor shortages, with employers complaining they are struggling to fill around 40% of vacancies due to a lack of qualified candidates.
The situation is expected to worsen over the next three years, when Eurostat estimates Italy’s working population will fall by around 630,000, as the number of people reaching retirement age exceeds the number of new entrants into the labor market.
Italy’s central bank has urged the government to create “priority channels” to lure skilled workers from abroad to quickly boost recovery plans.
But Giorgia Meloni’s right-wing coalition is ambivalent about allowing non-European immigrant workers to fill gaps in the labor market, instead cutting social welfare programs to push people it deems “employable” into employment.
Italy has issued 82,750 work permits this year alone to immigrants from outside the EU through its annual lottery system, although employers have applied for more than 240,000 permits this year to meet their labor needs.
Towns that receive funding for infrastructure upgrades also lack experienced administrators to oversee the work.
“In public administration, we don’t have anyone in charge of these projects,” said Padua city councilor Francesca Benciolini.Her city will receive 238 million euros from the EU Covid-19 fund to build a new tram line
“In all technical jobs like architects and engineering,” Benciolini added, “we can’t find people. It’s a national problem.”