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ECONOMY

Old woes threaten Italy’s economic revival

Italy's economic recovery is under threat from longstanding woes, according to the World Economic Forum's annual report on competitiveness, which was released on Wednesday.

Old woes threaten Italy's economic revival
Italy was ranked 43rd place, six places up from last year, in the WEF annual competitiveness report. Photo: JT/Flickr

The report ranked Italy far behind its European neighbours, with the country finishing in a lowly 43rd place out of the 140 surveyed by the report – one place below Kazakhstan.

In spite of a generally strong performance by Italy, the bel paese was badly let down in some areas, which dragged down its overall score. It came in 139th position for burdensome red tape, 136th for public debt and 126th for labour market forces.

The report stated that Italy's low scores would make any recovery brittle, in spite of the fact that the Italian economy is forecast to return to growth this year.

Italy lagged far behind Switzerland, which was ranked the most competitive country for the seventh consecutive year, while Germany ranked fourth and the UK 10th.

The WEF's annual report collects economic data from 12 different 'pillars' affecting competitiveness, measuring factors that determine a country's productivity and prosperity, such as public institutions, economic policies, healthcare and raw materials.

But old gripes aside, It was not all bad news. 

Overall, Italy moved up six places on last year and scored very highly for its domestic market, healthcare, primary education and its electrical and telecommunications infrastructure – which were all ranked among the top 30.

The report recommended that Italy “needs to continue implementing structural reforms to improve productivity, which remains low compared to other European countries.”

The report also highlighted the economic gulf between northern and southern Europe – as the map below shows.

 

The report stated that since the economic crisis began in 2007 the less competitive economies of southern Europe have struggled to return to pre-crisis levels.

“Over the past years, the more-competitive economies systematically outperformed the least competitive in terms of economic growth; they either withstood the crisis better or recovered more quickly. This suggests that competitiveness drives resilience, which is important in light of future potential shocks,” the report stated.

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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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