No End in Sight to Italy's Economic Decline

[pscot]

Last fall, the situation looked to be improving, to the point that then Prime Minister Mario Monti promised that "things will improve next year." But those hopes have now faded. The government has reduced its growth expectations for the current year to minus 1.3 percent. The Bank of Italy, the country's central bank, is even more pessimistic, forecasting economic contraction of 1.9 percent.

But economic growth only tells part of the story. More than half a million industrial jobs have been lost since 2007, and 15 percent of the country's industrial capacity is gone, says Luca Paolazzi, head of research for Confindustria, Italy's leading industry association. Some sectors have lost even more capacity, with the automobile industry having declined by 40 percent. According to Paolazzi, Italy is experiencing an "unprecedented process of deindustrialization."

But why? Many products that are made in Italy are still in demand internationally, and not just Armani suits or the Fiat 500. Furthermore, Italy, like Germany, has been able to increase its exports in the last three years.

But while exports boosted domestic production in Germany, the same did not happen in Italy. Italian experts attribute this to the growing tendency to produce elements of export goods in Southeast Asia, Poland and Turkey. Many companies merely use plants in Italy to assemble parts made in factories abroad.

http://www.spiegel.de/international/europe/economic-crisis-in-italy-continues-to-worsen-a-912716.html

[antiquie]

1. Sad, and all too familiar. nt