The Italian economy is going worse not only than hoped for by the Government, but than the forecasts of both Italian and international research centres. The causes are now clear: on the one hand the sharp slowdown in GDP and international trade, and on the other the weight of the structural inefficiencies accumulated over the last twenty or thirty years which hold back competitiveness, generating distrust and uncertainty in investors and consumers .
The analysis by the Confindustria Study Center presented by Luca Paolazzi in the presence of Minister Pier Carlo Padoan outlines a very worrying picture both for this year, when growth is expected to stop at 0,7% and, and above all, for next year which the CSC forecasts a rise in GDP of just 0,5%. These are numbers that other institutions such as the Bank of Italy and Prometeia have found very pessimistic, and which the Minister of Economy has disputed above all because these forecasts do not incorporate the effects of the maneuver being prepared for the stability law and which – in Padoan's opinion – could positively influence expectations and therefore accelerate the growth rate.
The analysis of the situation in a nutshell highlights, as far as the international side is concerned, a sharp drop in the rate of growth of GDP which should drop from 3,2% to 2,4%, and an even sharper contraction in foreign trade which is seen to drop from +6,8% to just +1,8%. It should be noted that the fall in the growth rate of international trade below the growth of GDP testifies to the intensification of protectionist policies which, in defiance of the proclamations of the heads of state, many countries are adopting with the risk of repeating the serious mistake made after the crisis of '29 when autarkic policies made recovery more difficult.
If Italy suffers the consequences of the general crisis more than other countries, this is due to the mistakes made in the past years (the "wasted fifteen years" says the CSC analysis) and therefore to the inefficiencies that have accumulated in the system which have reduced there
productivity and growth potential. The brakes are well known: bureaucracy, complex and unclear rules, lengthy and unpredictable justice, high taxation, poor infrastructure, labor market institutions that are not functional to correct mobility,
stiff competition. On many of these issues, the Government has launched a series of reforms which must now be implemented constantly and which will have to contribute to a cultural change in order to fully unfold their effects.
The underlying reasons for Italian stagnation must therefore be sought upstream of strictly economic interventions, and pertain to the functioning of our institutions and the decision-making paralysis induced by too many levels of political power in constant competition with each other. For this reason, President Boccia and Minister Padoan found themselves in full agreement in hoping for a vote in favor of the referendum to amend the Constitution. It is the first step towards having more stable governments and therefore capable of formulating long-term reform policies, and to put some order between the tasks of the State and those of the Regions.
As regards things to be done immediately, there was some difference in accents between Minister Padoan and the president of Confindustria Boccia. The latter was particularly clear in hoping that the next stability law should focus on the objective of improving competitiveness, therefore on a supply policy and not on supporting demand through various bonuses or too expensive pension reforms, even considering that from the data of the CSC it clearly emerges that the over sixty-five year olds have not so far suffered significant income reductions. A supply policy must focus on supporting productivity also through the tax reduction of company contracts, on effective incentives for investment and innovation and on special concessions to facilitate the raising of capital by companies outside the banking channels.
Confindustria was careful not to give support to Camusso's proposal based on the hiring of 6-700 thousand people in the public sector. Padoan reassured the entrepreneurs that the budget law will contain the confirmation of the reduction of Ires and other measures to lighten the tax burden on companies. In his opinion, a series of micro-economic measures will need to be implemented to facilitate the finding of financial means by businesses and to stimulate innovation. Finally, the minister underlined the role that public investments will have to play, for which the problem is not only one of resources but the streamlining of procedures and the implementation of the new procurement regulations.
Recalling that the increase in employment in Italy has been the highest among European countries in the last two years, the economy minister underlined that reforms give the most positive effects when they reach a critical mass (i.e. they remove various obstacles) and when they manage to change the behavior and expectations of citizens. There is therefore no lack of elements of concern regarding the trend of the Italian economy. However, this is not the time to abandon the path taken. On the contrary, it must be pursued with greater clarity, identifying the objectives carefully and using the few tools we have at our disposal adequately. "Patience and perseverance" could be the slogan of those who care about Italy's future, the goal of a true recovery could not be far off.
