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ECONOMY

Italy’s economy grows slower than EU average

The Italian economy grew by 0.2 percent in the second quarter of 2015, lower than the EU average, according to figures released by the national statistics agency, Istat.

Italy's economy grows slower than EU average
Palazzo delle Finanze, headquarters of the Ministry of Economy and Finance. Photo: Nicholas Gemini/Wikimedia

The 0.2 percent increase in GDP between April and June matches the 0.2 percent increase Italy recorded for January – March 2015.

Seasonally adjusted primary estimates from Istat show that GDP was 0.5 percent higher than during the second quarter of last year.

The figures were more positive news for Italy's economy, which is finally seeing positive growth after a lengthy triple-dip recession. But growth in Italy is still lagging behind the EU average, which was recorded at 0.4 percent for the same quarter.

Italy's Ministry of Economy and Finance told Corriere Della Sera that the results had been “as expected” but that there is still plenty of work to be done.

“The country must do more in terms of political, structural and economic reforms to favour growth,” the ministry said.

Germany's economy, Europe's biggest, grew by 0.4 percent.

Raj Badiani, senior economist at IHS Global Insight, said the outlook for Italy remained precarious with low energy prices, the weak euro and loose monetary policy in the eurozone having provided a temporary boost which would not necessarily be sustained.

“The economy staggered out of yet another recession in the latter stages of 2014, while the anticipated resumption of growth in the first half of 2015 was disappointing given it was the first gain since mid-2011, and was a lacklustre return from extremely supportive external factors,” Badiani said in a note.

Unemployment at over 12 percent of the labour force continues to dampen a consumer-led recovery in Italy and many observers see the country's longer term prospects as being blighted by an array of structural factors, ranging from relatively high labour costs to stifling bureaucracy and corruption which act as barriers to inward investment.

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MONEY

Italy expands €200 payment scheme and introduces public transport bonus

Italy's government will extend its proposed one-time €200 benefit to more people and introduce a €60 public transport payment, Italian media reported on Thursday.

Italy expands €200 payment scheme and introduces public transport bonus

Seasonal workers, domestic and cleaning staff, the self-employed, the unemployed and those on Italy’s ‘citizens’ income’ will be added to the categories of people in Italy eligible for a one-off €200 payment, ministers reportedly announced on Thursday evening.

The one-time bonus, announced earlier this week as part of a package of financial measures designed to offset the rising cost of living, was initially set to be for pensioners and workers on an income of less than €35,000 only.

However the government has now agreed to extend the payment to the additional groups following pressure from Italy’s labour, families, and regional affairs ministers and representatives of the Five Star Movement, according to news agency Ansa.

Pensioners and employees will reportedly receive the €200 benefit between June and July via a direct payment into their pension slip or pay packet.

For other groups, a special fund will be created at the Labour Ministry and the procedures for claiming and distributing payments detailed in an incoming decree, according to the Corriere della Sera news daily.

One new measure introduced at the cabinet meeting on Thursday is the introduction of a one-time €60 public transport bonus for students and workers earning below €35,000. The bonus is reportedly designed to encourage greater use of public transport and will take the form of an e-voucher that can be used when purchasing a bus, train or metro season pass.

Other provisions reportedly proposed in the energy and investment decree (decreto energia e investimenti), which is still being adjusted and amended, include extending energy bill discounts, cutting petrol excise duty and rolling on the deadline to claim Italy’s popular ‘superbonus 110’.

The €14 billion aid package, intended to lessen the economic impact of the war in Ukraine, will “fight the higher cost of living” and is “a temporary situation”, Prime Minister Mario Draghi has said.

The Local will report further details of the payment scheme once they become available following final approval of the decree.

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