"In Italy the macroeconomic picture deteriorated sharply following Russia's invasion of Ukraine: now the government's goal is to prevent the country from going back into recession”. The Economy Minister said, Daniel Francospeaking at the conference on corporate governance organized by Consob and Assonime.
“Two years after the outbreak of the pandemic – added the number one of the Treasury – this was supposed to be a recovery phase economy and gradual return to normality. For 90 days, however, we are living in a phase of difficulty and great uncertainty".
However, according to Franco, "this must not distract us" from the medium-term need to bring the country onto a more sustained growth path: for this purpose, "many complementary actions are necessary, such as strengthening investments in physical and human capital o improve the regulatory framework of the quality of services. But it is also crucial that companies become larger and more productive, focusing on technological innovation and market segments with high added value".
Franco: we need a regulatory framework favorable to the strengthening of businesses
The strengthening and modernization of businesses in Italy, the Economy Minister said, requires "an environment conducive to this process: it is necessary to intervene and provide a regulatory framework” and in this area Consob has developed “the most up-to-date framework”, especially with the green book on listed companies.
Furthermore, according to Franco, the Consob studies provide important indications on practices “to remove obstacles to competitiveness and towards development guidelines in a reasoned and shared manner. We must continue to work to strengthen the company's management structure and to encourage risk-taking for highly innovative projects and between companies. Consob's role will be fundamental in this”.
Franco: Italy's main problem is twenty years of stagnation
The new phase of economic difficulties triggered by the war in Ukraine and sanctions against Russia “must not make us lose sight our main problem: twenty years of substantial stagnation – Franco continued – Between 2000 and the onset of the pandemic, the Italian product remained essentially stagnant”, while it increased at more or less dynamic rates in the USA, Spain, Germany and France.
The growth reflects various factors, but "above all the remarkable dynamics of investment in physical capital". This is why in Italy the aim is to increase gross fixed investments to 22% of GDP in the coming years, in line with the European average "and part of the investment will have to be made by the private sector - continued the minister - above all from the world of 'business".
Meanwhile, productivity dynamics have also been very weak in the last decade. A number of factors weigh in here as well, noted the minister, including low investment in human capital, the complexity of administrative procedures and civil justice, a more complex regulatory framework than in other countries, some company characteristics, in particular the financing model with little recourse to market instruments, and the small size of the companies.
