WHAT'S THE PROBLEM IN ITALY?

The roots of Italy's trouble lie in its huge debt and low growth rate. Italy's economy has been growing at only 0.3% and it is projected to grow at a similar feeble rate for the next few years. The Italian debt stands at about 127% of GDP (The fiscal deficit is € 1.84 trillion, the second highest debt in Europe).

The problem for Italy is that it is not going to be able to generate enough resources to pay for its debt. While the Italian Government has passed austerity measures, not enough efforts have been made to stimulate the economy and carry out structural reforms.

Although there's no quick fix, the following steps need to be urgently initiated:

• Economic reforms are needed to stimulate growth;
• Stick to the terms of the recently approved austerity package (€ 54 billion);
• Invest in education, university, research and innovation;
• Develop the Italian labour market to make Italian companies competitive against those of emerging economies;
• Improve market liberalization and consumer choice in the services and professions;
• Simplification of bureaucratic procedures and a stronger legal framework;
• Develop Southern Italy and provide incentives;
• Reform of welfare state;
• Develop programmes for efficient and multiple supplies for energy
• Modernize public administration;
• Develop infrastructure and mobility (trans-European networks) with the help of EU funds;
• Attract new investments
• Seek the support of its partners in Europe (France, Germany, European Central Bank)

The receptiveness of Italians to innovative technology, make Italy one of the leading markets worldwide for launching new products and services. But what the country needs is strong economic leadership and government support that is determined to engage the necessary economic and structural reforms.