Monday, July 4

Italy, from last in line to European locomotive?

  • The Italian GDP, with the impulse of the new Prime Minister, Mario Draghi, will grow this year by 6.3%, the best figure in decades, and more than the US and many EU countries

  • The question that arises now is whether the growth of the transalpine country will be prolonged and whether the wealth generated will be distributed

Last June, when Italian gross domestic product (GDP) was expected to grow by around 5% this year, Renato Brunetta, the Italian Minister of Public Administration and economist, asked himself: “What if this time was the good one?” “The wind is changing,” he reflected next. Today, when not a year has passed since your last great political crisis, Italy It has jumped vertiginously from the anachronism that it has been in recent decades – a country frozen in the past, with practically zero growth, considered the great sickness of Europe – to the economy that has most surprised observers with its good performance. So much so that several analysts have begun to refer to it as the true locomotive of Europe – along with France – at this stage of development. post-covid economic recovery.

Not even the international institutions expected such striking growth, after the country’s thunderous economic bump in 2020 (a drop in gross domestic product, GDP, of 8.9%), and the structural problems that the country has dragged on for years. It has been the forecasts of the last weeks that have revealed that the increase in Italian GDP is much higher than the previous estimate. Specifically, according to the latest figures from the Organization for Economic Cooperation and Development (OECD), which are similar to those of the European Commission, Italian GDP will grow by 6.3% this year. A figure that was not seen in Italy since the “economic miracle” after the Second World War, and a figure higher than that of the United States and many countries of the European Union (EU), such as Germany and Spain.

Promising forecasts

Forecasts for the future are also promising. It is estimated that the Italian economy will recover its pre-covid levels in the second half of 2022, and that the inflation keep prices lower than the eurozone average, with an estimated increase of 2% for the triennium 2021-23, which will help companies to stay competitive. The beginning of the Italian recovery coincided with the relaxation of the measures in the spring of this year, which was followed, with the appearance of the new variants, a mixture of incentives, new rules and punishments adopted by the Government to stop the coronavirus (Italy was, for example, the first EU country to introduce the mandatory Covid passport for work).

The vast majority of experts agree that all this is the result of the management of ‘Super Mario’, Mario Draghi, the former head of the European Central Bank (ECB), who took the reins of the country last February. And the praises also come from outside. The British magazine The Economist has chosen Italy as “country of the year”. “Due to the poor management of various governments, Italians in 2019 were poorer than in 2000. But this year things have changed,” argued the magazine. And so the president of the European Commission, Ursula von der Leyen. “The management of the pandemic has been effective, vaccination is going like a train, the economy is growing faster than ever,” said the European official, in an intervention on Sunday at the Catholic University of Milan. “My hat is off to Italy’s determination,” said Germany’s new Chancellor Olaf Scholz on Monday.

Family consumption

How is this extraordinary story possible? The rest of the macroeconomic figures provide some answers. Notable, for example, is the reactivation of family consumption, a Industrial production which has already recovered pre-covid levels (although in November it registered a slight decrease, of 0.6%), and exports that have also grown steadily again, mainly thanks to four regions of the rich north of Italy , Lombardy, Emilia Romagna, Veneto and Piedmont. “In the first 10 months of this year, exports stood at 423,000 million euros in absolute terms. It is a figure never seen before: it also exceeds the figure for 2019 when it reached 402,000 million euros (in the same period of time), ”said the Italian Foreign Minister, Luigi di Maio, recently euphoric.

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The question is, of course, whether the growth will be prolonged. And this depends a lot on how Italy will manage the more than 200 billion euros of European recovery funds, which Italy will begin to receive as of next year and for which the Government has created a group of 1,000 external experts from all sectors who will be in charge of ensuring that Italian regional administrations manage and execute their projects correctly. With this preamble, and with the pride also recovered by the recent bilateral cooperation treaty signed between Italy and France, the only black clouds that float over these results at the moment are those related to doubts about whether it will be possible for wealth to reach everyone. .

The long queues in front of the soup kitchens of the parishes and Caritas in Milan, as well as the large number of companies that choose to relocate, the record drop in births and the increase in the absolute poor (one million more with the pandemic, for a total 5.5 million people), question this. The unions, which a few days ago called a general strike – practically ignored by the elites – remembered it.

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