ITALY is experiencing a crisis of confidence that is both
domestic and international. However, don’t think this is a game
over, for the country has still huge potential. It has been a year
since Matteo Renzi took over as Italy’s Prime Minister, the 22nd
of February 2014. From 2011 to 2014, the country found itself in the
midst of another political crisis which clearly affected its
credibility among international investors.
On November 2011, following Berlusconi’s resignation, the
economist and former EU commissioner Mario Monti became Prime
Minister and formed a government of technocrats, which would navigate
until the next general elections in February 2013. Enrico Letta would
then step in as Premier, but would resign not even a year later, as
he lost the fight against Renzi within his own party.Since then Mr.
Renzi, who is the former mayor of Florence and the youngest national
leader in Europe, sought to deal with the difficult task of
implementing the much-needed economic reforms demanded by the
European Union and the International Monetary Fund, so to restore
market confidence and revamp the economy (real GDP will post a poor
0.4 percent of growth in 2015 and 0.8 in 2016, according to the
IMF).During the past 12 months Renzi’s cabinet has been committed
mainly to boost job creation and growth, improving domestic
competition and easing the burden of burocracy which hinders an
otherwise dynamic private sector. “If fully and effectively
implemented, these reforms could contribute to improving
competitiveness and addressing some long-standing obstacles to
growth”, wrote the European Commission in a recent
paper.
True, Italy is under deep and close scrutiny from international
markets – and that is just right. Unemployement is over 12 percent,
GDP growth is sluggish and the economy is still 9% below the peak it
reached before the crisis unfolded. In its latest
report the OECD wrote that ”the lack of recovery from recession
is leading Italy’s income per capita to fall further behind the
leading OECD economies. The productivity preformance continues to lag
and labour force participation remains weak”.Yet, it would be a
mistake to consider the country as a dead man walking, for the
current crisis belongs primarily to the political realm. The recovery
of the domestic economy could have already been boosted had the
necessary reforms been implemented earlier. This is to say that the
changing of the political landscape for the better should unleash the
potential Italy still has.
The economic significance of the Belpaese still is quite
remarkable. Italy is the third largest economy of the eurozone, the
8th largest in the world by nominal GDP. It is the 11h world’s
largest exporter, generating around 3 percent of world merchandise
trade. Italy has the second largest industrial output of Europe
behind Germany. The UNCTAD/WTO 2009 Trade
Performance Index places Italy second among the G20 countries,
just behind Germany. “Made in Italy” goods – from fashion to
food – are masterclass, worldwide renowned products.One of Italy’s
biggest economic troubles – together with tax evasion and hidden
economy, is its massive public debt (around 132 percent of GDP, the
second-biggest public debt as a percentage of GDP among all the euro
countries). However, the percentage of public debt being held by
foreigners is above France and Germany and its private debt is one of
the lowest among developed countries whereas household wealth is one
of the highest. What is more, if you take out interest payments from
the debt equation than you’ll discover that Italy holds a primary
surplus. As a matter of fact, Italy’s primary surplus is among
the highest
in the world and has been the most stable among EU member States
in the past 20 years. Italy is still a rich country, with its people
being the most precious strength.
Italians are creative by nature, as the latest Government
advertising campaing showscases: from the helicopter to the radio
to the Google’s search algorithm, Italians contributed (and still
do, often outside Italian borders) to some of the most important
inventions of humankind. During the last decade not enough attention
has been given to the needs of younger generations – the inventors
of tomorrow. According to the National Statistics Bureau, youth
unemployement is around 42 percent whereas the Neet (Not in
Education, Employment or Training) population counts more than 2
million people. This means losing out the contry’s brighest and
most dynamic minds. Improving these stats, Mr Renzi said, is the
number one priority of his government.
With the recent election of
the newly elected president, Sergio Mattarella, Italy has a genuine
chance for a reset. Not only has the country a Prime Minister who is
determined to hold office until the next scheduled elections planned
in 2018 – hence bringing about much-needed political stability. It
can count on a president with the highest moral values, a former
constitutional court judge and an expert politician who considers the
fight against organized crime and corruption as absolute priorities.
Reference:
Nessun commento:
Posta un commento