In the season of economic stagnation that Europe is living, a rather surprising development has arisen, as Italy, widely considered one of the old continent’s most fragile economies, has jumped forward as the fastest growing nation.
This has been acknowledged by both the German and the British press, two of Italy’s most traditional economic rivals for the European leadership.
German paper Deutsche Welle went as far as saying that the country led by conservative Prime Minister Georgia Meloni was EU’s new ‘locomotive’.
“While governments in Rome were used to announcing depressing growth forecasts and poor debt rankings in the years before the pandemic, the country is now quickly becoming Europe’s growth engine.
In the last quarter, the Italian economy grew by 0.6%, while the German economy shrunk by 0.3% in the same period. Beyond this short three-month snapshot, other figures for Europe’s third-largest economy are impressive.
‘The Italian economy has grown by 3.8% since 2019’, said Jörg Krämer, chief economist at Commerzbank. That is ‘twice as much as the French economy and five times more than the German economy’, he told DW.”
In Germany, the prospects are indeed looking bleak. The Organization for Economic Cooperation and Development (OECD) predicts growth of 0.3% this year for Germany.
“Leading German experts are only expecting growth of 0.1%. Italy, on the other hand, is expected to grow by 0.7% this year, according to the [Organization for Economic Cooperation and Development].
The Italian stock market is also benefiting from the optimistic mood. The FTSE MIB benchmark index, which is made up of 40 big companies, rose by around 28% last year, more than any other European stock market indices. Italy is on track for more growth.”
Meanwhile, the British press is equally impressed with the Italian performance, as the country bounces vigorously back from the pandemic slowdown and the energy crisis.
Telegraph reported:
“Unlike all the others, moreover, Italy is enjoying strong per capita growth, the measure that really matters as a gauge of whether citizens are getting richer or not. After decades of stagnation, real GDP per head is nearly 5pc higher today than it was before the pandemic, far outstripping Germany, France, the UK and Spain.”
The British paper makes the surprising claim that ‘Italy has relatively low levels of net immigration’.
“Two or three years of relatively strong growth do not a summer make; we should be careful not to jump to conclusions about some kind of economic transformation in the making.
Many commentators see the current growth spurt as no more than a flash in the pan, explained primarily by Italy’s outsized share of the European Union’s ‘next generation’, post-pandemic recovery fund.”
The stimulus awarded by the current infrastructure boom will be short-lived. But the good news come from the newfound political stability.
“Yet Italy’s greatest weakness has long been not its inequalities, its apparently mountainous public debts, its byzantine protections, its tax-evading citizens or its never-ending insolvency procedures, but its politics.”
After 16 governments in 20 years, the discontinuity in economic policy has hindered foreign investment.
Read more:
Italy’s Giorgia Meloni and U.K.’s Rishi Sunak Join Forces to Tackle Mass Migration to Europe
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