Italy’s Downward Spiral
Italy is now in a triple-dip recession. But it didn’t get there by itself: Though the economy’s long slide reflects Italian leaders’ failure to confront the country's loss of competitiveness, it is a failure that is widely shared in Europe.
MUNICH – Italy is now in a triple-dip recession. But it didn’t get there by itself. Yes, the economy’s long slide reflects Italian leaders’ failure to confront the country’s loss of competitiveness; but it is a failure that is widely shared in Europe.
When the financial crisis erupted in the fourth quarter of 2007, Italy’s GDP plummeted by 7%, then picked up by 3%, dropped again by 5%, rebounded by a measly 0.1%, and lately, during the first half of this year, shrank again, this time by 0.3%. Altogether, Italian GDP has contracted by 9% during the past seven years.
Industrial production, moreover, has plunged by a staggering 24%. Only thanks to stubbornly persistent inflation has Italy’s nominal GDP managed to remain constant. Overall unemployment has climbed to 12%, while the rate for youth not attending school has soared to 44%.
We hope you're enjoying Project Syndicate.
To continue reading, subscribe now.
Get unlimited access to PS premium content, including in-depth commentaries, book reviews, exclusive interviews, On Point, the Big Picture, the PS Archive, and our annual year-ahead magazine.
Already have an account or want to create one to read two commentaries for free? Log in