The GDP rises and the “Italian ship” sails on. Now what’s needed are productivity and infrastructure policies
And so, the ship sails on – to transpose the vivid metaphor from the title of one of Federico Fellini’s exemplary film to real life. In spite of everything. In spite of inefficient bureaucracy and slow and warped judicial practices weighing it down. In spite of the rust that’s slowing down our productive gears – as Italy continues to lag behind in European ranks. In spite of a precarious feeling permeating the employment sphere, especially disheartening the younger generations and women (as President Sergio Mattarella aptly reminded us in his speech on 1 May, International Workers’ Day). In spite of a public debt that keeps on ticking up – also in relation to the Gross Domestic Product – and continues to exert a worrying pressure on Italy’s vulnerable condition as well as on its social, and therefore political, balance.
The ship sails on all the same, as the latest GDP data attests, showing a rise of 0.5% in the first quarter of 2023 – more than was expected and better than that of France and Germany – and sufficient to drive up this year’s growth to 0.8%, with a chance of reaching a satisfactory 1% by the end of 2023 (higher than the alarming predictions made by the IMF and the Bank of Italy).
“Favourable winds are blowing and steering the course of the Italian economy”, comments the Centro Studi Confindustria research centre, likewise pleased with a drop in gas prices that is “bolstering the confidence” of people and enterprises, as well as contributing to the reduction of inflation (which is nevertheless still high, with negative consequences on purchasing power and thus on the quality of life of millions of families).
According to ISTAT, this GDP growth is pretty much reliant on all factors involved, from domestic demand and export to manufacturing and services (starting with tourism).
Now, the key question is, “How do we keep on growing?” On newspaper Il Foglio (30 April), Dario Di Vico rightly warns us not to squander the opportunities arising from investments generated by the PNRR (Italian recovery and resilience plan) and not to scatter resources by implementing tax cuts and redistributive benefits for particular social classes. Rather, we should target, through discerning policies, the material and digital infrastructures of which Italy is still in dire need of (education and training, healthcare and hospitals, railways, ports and telecommunication networks, including investments in 5G, regarding which the government continues to drag its feet).
This is the crucial issue that both government and political and social forces must prove to be able to competently tackle, so as to also consolidate Italy’s leading role within the EU context (also closing the chapter on the ESM, whose failed ratification of the ESM damages and undermines Italy’s credibility).
The GDP growth experienced at the beginning of 2023 brings back to the fore those comparisons – already widely discussed – between the extraordinary dynamism exhibited by the Italian economy in 2021 and 2022, during which the GDP rose of almost 11%, and that of its golden era, the booming 1950s and 1960s. Such a performance was largely due to those companies that invested, innovated and conquered their place on the international markets, companies that fully exploited the opportunities generated by new digital technologies as well as by the smart and effective “Industry 4.0” fiscal stimulus.
A lesson that’s still valid today. Indeed, we need to facilitate the environmental and digital twin transition, which several companies and whole production chains are already embracing, and the government should reward the most proactive economic actors.
After all, there’s plenty of economics literature explaining how to do it, as minister Giorgetti is well aware of. Moreover, actual tangible proposals are being made by territorial entrepreneurial association Confindustria, regional associations more deeply involved in development processes – from Assolombarda to the Unione Industriali Torino – and organisations in the Emilia and Veneto regions, as well as professional associations (related to mechatronics, avionics, chemical, pharmaceutical, agrifood, etc.).
What do companies need, then, in order to keep on driving sustainable development, employment, wealth and well-being, change? It’s always the same answer:
they need Europe – European industrial and tax policies, shared European decisions concerning raw material, safety and defence. They need a Europe not overpowered by “Atlanticism” – however important the special relations built on alliance and shared values and interests we have with the United States – but able to drive better competitiveness than China, India, and the other global protagonists, from South America to Africa.
Companies need people, and therefore long-term training schemes and qualified (or at least skilled) human resources, as well as smart immigration policies.
They need political and cultural decisions that will strengthen and revive the concept of “Made in Italy” throughout the world (going beyond the platitudes and provincial stereotypes depicting the “typical” Italian people). As such, they need international and cultural policies able to enhance Italy’s extraordinary distinguishing feature: a “polytechnic culture” that blends humanities and sciences, an aptitude for “beauty” and an attitude for high-tech innovation.
Essentially, companies need long-term certainties in order to invest and consolidate their competitiveness, as well as a fiscal stimulus promoting productivity (tied to salaries and performance bonuses, so as to significantly improve employees’ purchasing power). And, moreover, they need strong support in order to withstand the expansion of open markets and effective competitiveness (thus, ultimately, not having to capitulate to corporations and protected businesses, as the ongoing issue concerning beach concessions illustrates).
Confindustria, aware that boundaries can be overcome (through productive public spending) and opportunities seized, is right in reiterating that the public debt must be tackled and progressively reduced – just as the reforms to the new EU Stability and Growth Pact indicate. This would stave off risky negative assessments by international rating agencies and large global financial operators, which may increase the costs of loans to finance the public debt and thus decrease the resources available to public services and for development investments (indeed, Goldman Sachs’s recent doubtful assessments of Italian bonds are setting off some alarm bells).
Thus: the “Italian ship” sails on, to everyone’s satisfaction, though it does so amidst shallows and rocks, in treacherous waters, and it can’t afford to make any mistakes.
(photo Getty Images)
And so, the ship sails on – to transpose the vivid metaphor from the title of one of Federico Fellini’s exemplary film to real life. In spite of everything. In spite of inefficient bureaucracy and slow and warped judicial practices weighing it down. In spite of the rust that’s slowing down our productive gears – as Italy continues to lag behind in European ranks. In spite of a precarious feeling permeating the employment sphere, especially disheartening the younger generations and women (as President Sergio Mattarella aptly reminded us in his speech on 1 May, International Workers’ Day). In spite of a public debt that keeps on ticking up – also in relation to the Gross Domestic Product – and continues to exert a worrying pressure on Italy’s vulnerable condition as well as on its social, and therefore political, balance.
The ship sails on all the same, as the latest GDP data attests, showing a rise of 0.5% in the first quarter of 2023 – more than was expected and better than that of France and Germany – and sufficient to drive up this year’s growth to 0.8%, with a chance of reaching a satisfactory 1% by the end of 2023 (higher than the alarming predictions made by the IMF and the Bank of Italy).
“Favourable winds are blowing and steering the course of the Italian economy”, comments the Centro Studi Confindustria research centre, likewise pleased with a drop in gas prices that is “bolstering the confidence” of people and enterprises, as well as contributing to the reduction of inflation (which is nevertheless still high, with negative consequences on purchasing power and thus on the quality of life of millions of families).
According to ISTAT, this GDP growth is pretty much reliant on all factors involved, from domestic demand and export to manufacturing and services (starting with tourism).
Now, the key question is, “How do we keep on growing?” On newspaper Il Foglio (30 April), Dario Di Vico rightly warns us not to squander the opportunities arising from investments generated by the PNRR (Italian recovery and resilience plan) and not to scatter resources by implementing tax cuts and redistributive benefits for particular social classes. Rather, we should target, through discerning policies, the material and digital infrastructures of which Italy is still in dire need of (education and training, healthcare and hospitals, railways, ports and telecommunication networks, including investments in 5G, regarding which the government continues to drag its feet).
This is the crucial issue that both government and political and social forces must prove to be able to competently tackle, so as to also consolidate Italy’s leading role within the EU context (also closing the chapter on the ESM, whose failed ratification of the ESM damages and undermines Italy’s credibility).
The GDP growth experienced at the beginning of 2023 brings back to the fore those comparisons – already widely discussed – between the extraordinary dynamism exhibited by the Italian economy in 2021 and 2022, during which the GDP rose of almost 11%, and that of its golden era, the booming 1950s and 1960s. Such a performance was largely due to those companies that invested, innovated and conquered their place on the international markets, companies that fully exploited the opportunities generated by new digital technologies as well as by the smart and effective “Industry 4.0” fiscal stimulus.
A lesson that’s still valid today. Indeed, we need to facilitate the environmental and digital twin transition, which several companies and whole production chains are already embracing, and the government should reward the most proactive economic actors.
After all, there’s plenty of economics literature explaining how to do it, as minister Giorgetti is well aware of. Moreover, actual tangible proposals are being made by territorial entrepreneurial association Confindustria, regional associations more deeply involved in development processes – from Assolombarda to the Unione Industriali Torino – and organisations in the Emilia and Veneto regions, as well as professional associations (related to mechatronics, avionics, chemical, pharmaceutical, agrifood, etc.).
What do companies need, then, in order to keep on driving sustainable development, employment, wealth and well-being, change? It’s always the same answer:
they need Europe – European industrial and tax policies, shared European decisions concerning raw material, safety and defence. They need a Europe not overpowered by “Atlanticism” – however important the special relations built on alliance and shared values and interests we have with the United States – but able to drive better competitiveness than China, India, and the other global protagonists, from South America to Africa.
Companies need people, and therefore long-term training schemes and qualified (or at least skilled) human resources, as well as smart immigration policies.
They need political and cultural decisions that will strengthen and revive the concept of “Made in Italy” throughout the world (going beyond the platitudes and provincial stereotypes depicting the “typical” Italian people). As such, they need international and cultural policies able to enhance Italy’s extraordinary distinguishing feature: a “polytechnic culture” that blends humanities and sciences, an aptitude for “beauty” and an attitude for high-tech innovation.
Essentially, companies need long-term certainties in order to invest and consolidate their competitiveness, as well as a fiscal stimulus promoting productivity (tied to salaries and performance bonuses, so as to significantly improve employees’ purchasing power). And, moreover, they need strong support in order to withstand the expansion of open markets and effective competitiveness (thus, ultimately, not having to capitulate to corporations and protected businesses, as the ongoing issue concerning beach concessions illustrates).
Confindustria, aware that boundaries can be overcome (through productive public spending) and opportunities seized, is right in reiterating that the public debt must be tackled and progressively reduced – just as the reforms to the new EU Stability and Growth Pact indicate. This would stave off risky negative assessments by international rating agencies and large global financial operators, which may increase the costs of loans to finance the public debt and thus decrease the resources available to public services and for development investments (indeed, Goldman Sachs’s recent doubtful assessments of Italian bonds are setting off some alarm bells).
Thus: the “Italian ship” sails on, to everyone’s satisfaction, though it does so amidst shallows and rocks, in treacherous waters, and it can’t afford to make any mistakes.
(photo Getty Images)