MILANO – “The economy is expected to recover to 2019 levels by the first half of 2022”, after growth for this year estimated at 5.9%. “Public debt will rise to almost 160% of GDP in 2021”. This is what theOECD in the Economic Survey on Italy, calling for “continuing to provide increasingly targeted fiscal support until the recovery is consolidated in the economic and employment sectors”. The OECD also hopes for “a medium-term fiscal plan to be implemented once the recovery is consolidated”, to “reduce the ratio of public debt to GDP”. “We aim for post-Covid growth that is higher” than that achieved “before the crisis linked to the pandemic,” said the Minister of Economy. Daniele Franco, during the press conference to present the report. “We must stop our long stagnation of the economic situation”.
Citizenship income has cushioned poverty but must be reduced
The OECD dedicates a separate chapter to citizenship income. The measure, writes the OECD, “has contributed to reducing the level of poverty of the poorest sections of the population” but “the number of beneficiaries who have actually found employment is scarce” and “the authorities attribute this result to the distance between the beneficiaries and their labor markets “. For this reason, according to the OECD, it is necessary to “reduce and thin the Citizenship Income to encourage beneficiaries to look for work in the formal economy and to introduce a subsidy for low-income workers”.
Franco (Economy): “GDP will grow by over 5.8%. But it is time for responsibility and major reforms”
“Pensions, stop at 100 and women’s option”
According to the OECD, Italy should then “contain pension spending by letting the early retirement scheme (” Quota 100 “) and the so-called” Woman Option “expire in December 2021, and immediately re-establish the correlation between retirement age and hope of life”. This is a point on which Minister Franco also replied: “Between the end of 2021 and the beginning of next year” we will have a strong change in retirement requirements, and the 100 quota will expire. We are aware that some economic sectors are facing difficulties, these are aspects to be taken into consideration “, said the minister.” We must discuss this in the Government “but” I am confident that the executive will find a balanced solution in the next budget law “.
“Government support mitigated job losses”
The Italian economy, writes the OECD in the document dedicated to our country, “is recovering from the crisis induced by the Covid-19 pandemic”. “The generous support of the government has mitigated job losses and adversity, and has also preserved production capacity”, continues the international body based in Paris, adding that “loan guarantees and moratoriums on repayment of the debt boosted corporate liquidity and limited bankruptcies. Part-time work regimes and a ban on dismissal were complemented by income support for those not benefiting from existing safety nets, along with postponing dates of payment of taxes owed. School attendance and educational outcomes are worsened for the most disadvantaged individuals; in contrast, social isolation due to the lockdown has been associated with an increase in domestic violence. “
Recovery, Cottarelli: “Italy is approaching + 6%. At the beginning of the new year we will recover the pre-crisis levels”
“Recovery in Italy will continue to be late”
For the OECD, “a significant fiscal support in 2021 will favor the recovery in the short term, with the acceleration of vaccination rates and the easing of restrictions. Huge public investments, including those financed by Next Generation EU funds, together to greater confidence and higher levels of demand, they will support investment in the private sector. ” And “however, compared to other large economies – warns the Parisian body – in Italy the recovery will continue to delay, with a GDP that will recover the levels of 2019 only in the first half of 2022. An increase in consumption is also expected when households they will be able to use part of their savings and employment levels will increase. “
“Public finance reforms needed”
The OECD therefore defines public finance reforms as “necessary” to encourage faster growth and a quantitative and qualitative increase in jobs “. “Despite relatively high public spending, spending that can best support growth and well-being is modest and has also declined.” “The Next Generation EU grant funds – specifies the OECD – are around 13.5% of GDP in 2020. The historic slowness of the absorption rates of EU funds derives from some factors that hinder planning, approval and program implementation. Procurement is slow, competition is limited and capabilities vary greatly. ” The OECD therefore recommends “improving the composition of public spending in order to promote growth and job creation. Improving coordination between the agencies in charge of implementing public investment projects in order to increase disbursement levels. . Compact the public procurement procedures currently entrusted to multiple small agencies and concentrate them in a smaller number of higher-capacity entities “.
Istat, the number of people employed fell in July. Youth unemployment drops to 27.7%
by Flavio Bini
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