CASTELLANZA There was repair support For Sergio Fracchia and For Eeva Selin like winning the lottery.
Their home, built in 1965, was in need of renovation, and now it could be completely paid for by the government.
– Yes, it seemed quite incredible, even though the state has given support for various renovations in the past. But not so generously, says Fracchia.
The couple’s house in Castellanza, northern Italy, has been given a new look over the past two years.
The renovation had to follow exact rules: it had to raise the energy efficiency class of the house by at least two notches.
Now the blue-painted facade shines: during the renovation, the house was fitted with sun-insulating windows, an eco-efficient water heater and solar panels. In addition, the insulation of the outer walls was improved.
The repair bill was “so big it makes me cry”, says Fracchia – more than 150,000 euros.
Italy’s building stock is in dire need of renovation
Former Prime Minister of Italy By Giuseppe Conte led by the populist government decided in 2020 on the subsidy called Superbonus 110%.
According to it, the consumer or the renovation company who did the energy renovation got the costs back as tax credits over five years. Alternatively, the renovation could be financed by a bank, which recovered the costs from the state.
Read Jenna Vehviläinen’s column about renovated Italy
The grant was the flagship project of the politics of the populist party Five Star Movement. Its idea was to increase the energy efficiency of Italian buildings, which is necessary according to experts.
60 percent of Italy’s building stock belongs to the bottom two energy class. The same figure is 17 percent in France and 6 percent in Germany.
According to the Italian research institute Nomisma, energy renovations have dripped on the carbon dioxide emissions side of living and have brought the owners almost a thousand euros in annual savings on energy bills.
The populist government’s flagship project also received EU support
However, the renovation grant is also one of the most criticized forms of support ever in Italy – and the largest single item of expenditure in the state budget.
The price tag for the support to the state is already more than 130 billion euros. It was financed from the European Union’s recovery money around 18 billion euros i.e. just under fifteen percent.
Italy receives a relatively large amount of the Union’s recovery aid and loan: a good 190 billion euros. In Italy, it has been seen as an important opportunity to reform society and revive the economy after the corona crisis that hit the country hard.
The Italian economy is expected to grow by around 0.6 percent this year. It is better than, for example, Germany.
Recovery support in the EU has been generous to traditional net recipients, i.e. to those countries that receive more from the EU budget than they pay into it. Italy has traditionally played the role of payer, but has fluctuated with subsidies at least temporarily to the recipient side.
Above is the most recent statistics published by the EU Commission on who are in the role of recipients and who are the payers.
Many of the net recipients also suffered the most in the corona crisis, so the EU considered the support to be justified.
Italy’s roughly 18 billion euro slice of the recovery aid used for renovations is almost ten times as much as Finland’s entire recovery aid.
Italy also spends money on, for example, improving road and rail connections and building kindergartens and renovating cultural sites.
Prices in the renovation industry are skyrocketing
The renovation support was criticized not only by the current far-right government, but also by experts.
– Too generous and poorly planned, commented an economist who studied the use of Italy’s stimulus money Gianfranco Message.
The aid caused a renovation frenzy in Italy, which led to chaos in the construction industry. Labor and material costs rose unreasonably high and renovations were delayed, says Viesti.
In addition, many renovations have been left unfinished because the contractors have run out of money after the banks decided to stop financing the renovations.
In the end, many citizens had to pay the renovation costs partly out of their own pockets, because the banks changed their rules regarding renovation loans in the middle of everything.
For example, Fracchia and Selin paid 10–15 percent of the rest of their renovation themselves.
There is also a repair grant got into traffic scammers.
The Italian police arrested 22 people in different EU countries at the beginning of April suspected of misuse of the Union’s support money. It is suspected that the criminal network got hold of money worth at least around 600 billion euros.
Sergio Fracchia is on the same lines. In his opinion, many people renovate their houses “just to renovate” because the grant was so generous.
Problems in the supervision of EU recovery subsidies in general
The supervision of recovery subsidies is lame throughout the EU, criticizes the professor of European law at the University of Helsinki Päivi Leino-Sandberg.
– A huge amount of taxpayers’ money is used for activities that are difficult to trace, he says.
Leino-Sandberg is one of the most visible researchers involved in the recovery support debate in Europe. According to him, it seems that subsidies have been approved in a hurry and without thorough evidence.
The principle of the recovery support is that the projects are started with the money of the member countries and the countries then claim the support amounts back from the EU with reports.
Leino-Sandberg takes, for example, the two aid tranches received by Portugal in December 2023, totaling 585 million euros. After the Commission’s evaluation, the member states had seven working days to approve the aid installments.
The number of pages of the reports and the amount of money spent are such that a careful review would require at least several weeks.
– There is no way to accurately evaluate them in seven working days, says Leino-Sandberg.
The European Court of Auditors, which is responsible for the use of EU money, has also stated several times that it is not able to adequately monitor the use of recovery subsidies. In March it warnedthat this can encourage corruption.
– The more public the use of funds is, the less corruption there will be, says Leino-Sandberg.
Electricity bill less than half of the previous one
The exterior renovation of Fracchia and Selini’s house was completed at the end of last year, and savings have already been accumulated.
In January, the couple’s electricity bill dropped to less than half of what it was before, and the heating was only turned on in December instead of October last year.
– The new insulation should keep the house cool even in the summer, when it’s getting hotter in Italy. Let’s see how it goes, says Fracchia.
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