September 6, 2015 – Sky News 24 aired an interview with SEP Senior Fellow Fabrizio Saccomanni. Below is a rough translation.
Sky: Do you share Padoan’s opinion that Italy is recovering from this recession?
Yes, I think that, as was said by the director of Banca Italia yesterday, Italy seems to be recovering from the recession. The fundamentals are better than they were in the past, in part because of favorable circumstances on the international level, and in part because of the measures that have been taken, one could say, by all the governments that came after Monti. They had to combat the crisis, increase public financing, and by doing they sparked growth and structural reforms.
The other question is if this recovery will last. If the measures continue and the international environment remains positive, I think it will play a factor. I think that there have been improvements in the private sector with regard to investments and the use of financial instruments to improve growth. My concern is over political stability. Unfortunately, one hears people speaking of the possibility of elections in the next year, and I think Italy needs political stability. A political “pause” would also put investment, consumption, and lending on hold, which would be a worrying development.
Sky: Do the developments in the G20 talks leave any margin for further economic measures dedicated to growth?
Both in the G20 and Europe, there are promoters of growth. The problem is how do we do it? In the past, we followed measures to stimulate growth that resulted in few long-term gains, creating more debt without increasing employment. Today, thinking about the Junker plan for investment, there is a platform for an enduring economic rejuvenation, and we absolutely have to take advantage of it. Particularly in Italy, increasing investment in structural infrastructure, in the energy, transportation, and digital sectors, is very important. We would need to do it in the European context, creating a network throughout Europe for these sectors.
Sky: Do you think the estimate for GDP growth can increase even further?
As the minister said, this 0.7% has already been achieved, and for it to stay at this number growth in the next quarters would have to be zero or below. However, the goal is to get back to the 2% growth rate we had before the crisis.
Sky: ISTAT numbers show a decrease in unemployment. To whom can we credit this positive development?
As Minister Poletti said, the change in the contractual regime in the labor market has played an important role. Before, companies were hiring people on short-term contracts, but now they are taking on more people with long-term contracts. The fact that firms are hiring more suggests that we are on the road out of this recession.