Ladies and gentlemen,

Robert Schuman, one of the founders of the European project, once said: “Europe will not be made all at once, or according to a single plan. It will be built through concrete achievements which first create a de facto solidarity.”   

Although concrete action was needed, in a Europe that had to be rebuilt from the ruins of the Second World War, solidarity was a more pressing objective that was also to a certain extent a new development in European history.

The word “solidarity” is derived from the Latin word “solidus” meaning “mutual support” and telling us that a body's strength lies in its cohesion. Cohesion that – on a social level – stems from the idea of sharing a common destiny. An inclusive and cohesive society is therefore a strong society.

It is no coincidence that the words “solidarity and cohesion” appear regularly in EU texts.

After the crises that Europe has seen over the last decade, the call for solidarity is more pressing than ever, as the landscape of our continent is much more varied than before.

To give a few figures: Germany's GDP is 11% higher than it was before the crisis.

 Italy's, however, is 7% lower.

Investments in core countries have risen by 10% compared to the pre-crisis period, while they have fallen by 20% in peripheral countries like Italy.

The current unemployment rate in Germany is 3%, while it is over 10% in Italy.

More specifically, there are 900 000 unemployed people southern Italy alone, i.e. 50% more than in the whole of Germany, which has a population of 82 million compared to southern Italy's 20 million.

Lastly, education, which in my opinion is key if we want to look to the future with hope.

In Italy, only 18% of the active population has a degree (the OECD average is 37%). These are worrying figures in a world where being competitive requires a high level of research and innovation, and therefore high levels of education.

In addition to these two Europes – core and peripheral countries – come two Italies – the generally prosperous and dynamic North, and the South.

The Svimez report includes concerning data on the quantitative and qualitative depletion of the population: over the last 16 years almost 1.2 million people have left southern Italy, half of them young people aged between 15 and 34, with a fifth holding a degree. 16% of these have moved abroad.

The impact of all this on southern Italy's development potential is obvious. Indeed, between 2000 and 2016 southern Italy was among the European regions seeing GDP contract the most.

In the North, employment has grown by over 2% (hardly a brilliant figure in itself), while it has fallen by the same amount in the South. At the end of 2018, unemployment in southern Italy was 18.4% compared to 6.6% in the Centre and North. Youth unemployment figures – which are around 50% for some regions of the South – are among the worst in Europe.  

And the data on early school leaving is alarming: 18.5% of young people in the South abandon their studies compared to 11.1% in the Centre and North and 10.6% on average across Europe. Other figures indicate that 34% of 15-year-olds in the South have poor maths skills vs. 16% in the North.

Lastly, there is an issue with service quality. For example, in the South, there is a negative hospital capacity balance of 114 000 visits. Many southern families are obliged to travel north to access adequate health care.

It is therefore clear that if we want restore a credible growth outlook for Italy, we need to gradually bring production, employment and quality of education in the South back into line with the rest of Italy, and Italy into line with the best European countries.

Francesco Saverio Nitti said: “The southern question is not only an economic question, but also an educational and ethical one. Southern Italy should not need to ask for anything; it should just be more aware of its situation, and react to a state of affairs that fosters poverty and degradation.

These words still ring true today. But they should not make us forget that there is also a South that has developed a mature conscience, and that is moving forward thanks to a new entrepreneurial spirit. And that the whole of southern Italy could be inspired by this example.

As a banking institution, our work is based on knowledge of companies and development projects on the ground. And I can assure you: there are many businesses – even in southern Italy – that are very different to the (now outdated) stereotype.

At its Catania facilities, ST Microelectronics has launched a research programme for post-silicon era materials. The EIB has provided EUR 2.3bn in support for STM, EUR 1.4bn of which is for plants in Italy.

Of course, STM is a multinational industry giant, but it isn't the only innovative company. For example, in Puglia, MerMec (a leader in rail safety and signalling) received a EUR 30m EIB loan.

Staying in Puglia, via a partnership with MIUR (the Italian Ministry of Education, Universities and Research) we recently financed Roboze, a start-up founded by a 28-year-old entrepreneur and winner of Ernst & Young's “start-up 2018” prize who was included on Forbes’ list of Europe's most influential people under 30. Roboze uses 3D printing techniques to make products for giants such as Airbus, Bosch, Mercedes and GE.

This is an interesting signal and an opportunity, because it shows us that in a globalised and highly digital world – where the cost of transporting goods is falling – some parts of the production process do not need to be located close to the main plants.

The EIB has an unbreakable bond with southern Italy.

At the Messina Conference in 1955, Italy proposed creating a financial institution to support the common development of Europe and in particular of less developed regions.

This idea was incorporated into the Treaty of Rome and led to the founding of the EIB in 1958, in line with the Treaty's aim for the “harmonious development” of Europe.

Going back to the words of Schuman, the creation of the EIB was a concrete initiative to implement the principle of solidarity.

From then on, the goal of territorial cohesion was central to the Bank's activities.

And Italy is one of the biggest beneficiaries of EU resources of all kinds: not only EIB financing, but also structural funds.

In the current multiannual financial framework, our country has been allocated EUR 44.6bn in EU funds, two-thirds of which target disadvantaged areas, i.e. the eight southern regions.

However, at the end of 2018 Italy was behind in its implementation of fund use programmes: only 20% was spent, below the EU average (27%) and fourth lowest among EU countries. Now, while we are trying hard to avoid losing the funds for the 2014-2020 period, other countries are already planning their investments for the 2021-2027 period.

This shows how difficult it is to make public investments, particularly in the South. The reasons for this are numerous and varied. The curb on making investments is often not derived from the availability of funds, but rather from the depletion of the technical skills of the Public Administration – the worst legacy of the crisis in my opinion – as well as from difficulties in navigating through a maze of embedded rules.

We are offering our help to overcome these difficulties, for example with the JASPERS (Joint Assistance to Support Projects in European Regions) free EU technical assistance programme. The support of our technicians for several southern Italian Regions makes it possible to avoid the loss of hundreds of millions of euros of structural funds every year.

For example, in 2015-2016, we supported 14 large-scale projects under the national transport programme and the Campania regional programme for the creation of road and rail hubs. Our technicians are currently assisting the Regions in other transport sector projects worth EUR 3bn, guaranteeing the comprehensive use of the funds available (e.g. for the completion of the Naples-Bari railway line).

As a result, structural funds can now be used in innovative ways. An example is the JESSICA (Joint European Support for Sustainable Investment in City Areas) initiative, which plans the establishment of urban development funds 

with the private sector to invest in economically viable regeneration projects. This has the added advantage of introducing the concept of “revolving” funds to previously non-repayable grants.

This instrument – adopted in Sicily, Campania and Sardinia – has supported 75 urban development and energy efficiency projects. Just under EUR 300m of structural funds have mobilised almost EUR 800m of investment, generating a 2.7x leverage effect.

There are many success stories in this regard.

EUR 1.4m invested in upgrading the Selargius ANFFAS centre in Sardinia, where people with intellectual disabilities are able to take part in the life of their community.

The Region's “Sardegna CO2.0” initiative to improve energy efficiency across the island received EUR 35m in funding.

Università Kore di Enna received EUR 12.4m. The university's facilities include a full motion flight simulator for its aerospace engineering course – a first for Europe.

The conversion of the former Peroni brewery in Naples and the upgrading of Universitá del Sannio in Benevento.

On the back of these positive experiences, MIUR has entrusted the EIB with the management of a EUR 186m fund to finance R&D projects in southern Italy in partnership with financial intermediaries: to date, over EUR 40m has gone to financing small innovative companies in the South.

We've already spoken about Roboze, but we also have: (1) ITEL – a small company from Puglia and a leader in the design of magnetic resonance equipment and medical imaging; (2) Blackshape – an innovative aerospace and aeronautics sector start-up based in Bari; and (3) CMD – a company with a presence in Campania and Basilicata operating in the internal combustion engine sector.

In summary, stimulating growth in southern regions requires high-quality investment programmes, infrastructure in the knowledge and innovation fields, R&D support and suitable credit.

The EIB Group can also play a role in supporting the growth of segments of the Italian financial system that are not yet sufficiently developed but that are needed to drive an innovation-based recovery in the South.

Here we're talking about guarantees for intermediaries lending to innovative start-ups (the EIB is implementing the EU's InnovFin programme), technology transfer funds (Itatech is a success story here) and venture financing in general, as although this is growing in Italy, it is only 10-20% the size of more advanced European countries.

Just to give you an idea of the impact of this kind of action: in three years, the EIB has provided EUR 1.8bn of venture debt to highly innovative European businesses under the Juncker Plan. This will create an estimated 25 500 highly skilled jobs and a further EUR 16bn in R&D.

This comes in addition to the EUR 12bn that the EIF has invested in European venture capital funds to date.

In conclusion, I strongly believe that the recovery of southern Italy will be driven by investments in knowledge, innovation and research.

There is a term – leapfrogging – that means to make a development jump to reach a higher level without passing through the intermediary stages. 

Once the necessary infrastructure upgrades are complete (and I'm thinking of both tangible and intangible infrastructure here), perhaps the South could make this growth quality jump by building on the knowledge economy success stories I have mentioned and by focusing on resources – particularly human resources.

Nitti also wrote: “Southern Italy has little wealth and little industrial know-how. When spending on this, the Government has invested more in maintaining this dependency than in combating it. Industrial know-how is the very thing that needs to be promoted.” Today we could swap “industrial know-how” for “technological know-how”, but the meaning does not change. This text – “North and South” was published in 1900. 120 years may have passed, but the solution remains the same.

Thank you.