Italy's true problem absence of growth, economist says
2010-11-24 17:30:27
Strong market competition should be introduced and human heritage should be preserved to fuel Italy's growth, as the real problem of Italy's economy is stagnancy, a renowned economist told Xinhua in a recent interview.
"In the years before the outspread of the global financial crisis, Italy's growth has been one percent less than the rest of Europe, while during the crisis, it has fallen more than the other European countries, and now it is recovering at a very slow pace," Francesco Giavazzi, a professor of economics at Bocconi University in Milan, said.
He noted that Italy's public debt -- which amounts to 116 percent of the country's gross domestic product (GDP), the highest in Europe -- would remain very high if the country's GDP did not grow.
As another consequence of this stagnancy, he added, unemployment affecting millions of young Italians would continue.
According to the economist, to stimulate growth, Italy must first and foremost become significantly more competitive.
Giavazzi said he did not believe in "made up on the spot" industrial projects mapped out by industry ministers.
"I'd rather say that Italy's real industry minister is the president of our Antitrust, the authority granted to maintain market competition by regulating anti-competitive conduct," he said, adding that paying attention to the many warnings given by the Antitrust would bring about a big leap forward in competitiveness.
Italian financial markets are solid thanks to high savings, he said. However, Italy's banking system has a structural problem as almost all banks belong to so-called "foundations," non-profit institutions which oppose expanding operations into foreign countries, Giavazzi said.
In Giavazzi's opinion, the second important way to stimulate growth in Italy is reforming its education system and investing in the "extraordinary human capital that our country is still producing despite the bad performance of school and university systems."
Finally, Giavazzi said Italy should invest more in protecting its rich natural and cultural heritage rather than "shamefully pushing the preservation of its treasures to the bottom of priorities as it is now doing."