The darkness of the recession has already begun, but the real nightmare will come next year. In 2012 Italy's GDP will drop by 1,6%. The decline in 2011 will instead stop at 0,5%. This was the alarm raised by the Confindustria study centre, which sharply revised downwards the forecasts released in September, when it estimated GDP growth of 0,2% for the next 12 months.
A pale recovery will come only in 2013, when GDP will grow by 0,6%. However, the director of the CSC, Luca Paolazzi, underlined that the one elaborated is an optimistic scenario: “It is based on the idea and the hope that the crisis in the euro area will be overcome quickly, that this will allow the credit crunch to be stopped and that tensions on long-term interest rates rapidly, with the yield on BTPs below 5% by the spring”.
As for "balancing public finances, it is within reach": the deficit/GDP ratio will settle at 3,9% this year, while in 2012 it will drop to 1,5% and in 2013 to 0,1%. But the achievement of the objectives requires, according to the CSC, "the rapid return of rates on public securities from the high levels of November: with the yield on ten-year BTPs at 7,3%, interest charges would be almost 18 billion higher in 2013".
Beyond the public finances, the effects of the crisis threaten to be felt much longer on the labor market. Also according to the CSC, at the end of 2013 there will be 800 fewer people employed compared to the beginning of 2008: it is "very probable that the reintegration of people into the Cig will slow down, layoffs will increase, the unemployment rate will rise faster and reach 9%" in 2013. The lost work units will thus be 957 thousand. During the same period, the effective tax burden will reach all-time highs, well exceeding the 54%.
Faced with prospects of this type, the Confindustria Study Center believes that the rescue-Italy maneuver of the Monti government is a first step, but others must also follow, in particular "on the labor market, social safety nets, infrastructure, the costs of politics, administrative simplifications, civil justice, education and training , research and innovation, the fight against tax evasion accompanied by the reduction of tax rates”.
Finally, businesses: "A growing share struggles to obtain loans from banks" and there is the risk of a "further sharp deterioration if the sovereign debt crisis is not resolved quickly and the yield on government bonds is not normalised". The CSC estimates a rate on ten-year BTPs "well below 5% already in the first months of 2012, an average of 4,7% in 2013, otherwise the cost of bond funding by banks will remain at values incompatible with the provision of credit to businesses and families". According to the economists of viale dell'Astronomia, the revitalization of the Eurozone and in particular of Italy, more than on leveraging the official discount rate, "depends on the unblocking of credit, the return of trust between banks and the lowering of yields on government bonds in countries under attack".
