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A recipe to relaunch Italy’s economy

    • Meeting in digital format
    • 10 December 2020

          Italy must not underestimate the challenge of generating economic recovery using Next Generation EU resources. Europe, after so many years of hesitancy, made a decided shift in gears when it reached out to the market to collect the funds for reconstruction. It is now up to individual countries to submit credible recovery plans. There are various glitches to be resolved when it comes to the Italian situation – first among them being to formulate a consistent vision of the country’s future. Work needs to be done on governance and on clearly defining the public/private equilibrium: what responsibilities lie with whom? Italy should facilitate the many energies the country already boasts in business and innovation. Any uncertainty regarding government intervention does nothing but increase the fears of national and foreign investors at a moment marked by increased savings and lower consumption and investment.

          Another equally pressing problem for Italy is execution: i.e. implementing the projects submitted to Europe. This will be essential to receiving the promised funding – an even more important aspect in light of the more than 200 billion euro earmarked for Italy. Of that sum, only 80 billion is to be distributed as non-repayable grants; in the absence of new European taxes, that sum will be reduced to 40 billion, considering the contribution the country will have to make to Brussels for activating the plan. Nevertheless, the resources are substantial and they must be managed and applied wisely to projects truly capable of stimulating the economy. Priority areas of intervention should include digital technology and the low-cost/high-return justice and public administration reforms the country has been expecting for years.

          Neither can a concrete recovery plan for the Italian economy fail to consider the serious social crisis under way. This phenomenon has been aggravated by the pandemic but is rooted in an economic model that, over the past 50 years, has led to a burgeoning inequality across the entire Western world, with the symmetrical collapse of social cohesion. The main cause of this lies in the unbridled financialization of the economy that has struck Italy harder than many, as witnessed in the past decade’s speculative attacks on the national debt.   

          For the same reason, in addition to offering a plan for recovery, the Next Generation EU must serve as an occasion for reviewing the economic model. On the one hand, the focus must be on local needs; on the other, it must be on harmonizing European projects. Only in this way will Italy be able to contribute to Europe’s more solid and competitive response to economic and social threats.

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