Italy is in recession (The Wonders of Socialism!)

Corriere della Sera ^ | Mario Sensini

[a freedom-loving italian]

Alarm Grows Over Stagnant Italian Economy ISTAT announces 0.5% fall in GDP for early 2005. Manufacturing reports annual decline of 5.2%. Public sector wages next hurdle for government.

ROME - Italy’s gross domestic product has fallen for the second quarter running. There was a 0.5% drop between January and March in comparison with the previous quarter, and the year-on-year trend has plummeted from +0.8% at the end of 2004 to -0.2%. Again according to data released yesterday by the ISTAT statistics institute, industrial output fell in March by 5.2% on an annual basis. For economists, it is a “technical recession”. However for Prime Minister Silvio Berlusconi, who was not expecting such bad news, “it is not a recession”. But it still means big trouble. This year’s deficit, which was already under strain, could soar well above 4% merely as a result of lower growth. Paradoxically, this eases Italy’s problems with the European Union, because recession is considered an eminently valid mitigating factor to justify backsliding on public accounts.

“It’s a situation that does not encourage optimism, but that is why it is so necessary to react”, said Silvio Berlusconi...

[a freedom-loving italian]

Truly bad news from Italy, guys.

I like Berlusconi and his firm support for America and the WOT, but I must admit that he failed to deliver his promises on the economy.

In his defense one must say that Italy, like every other EURO country, has no longer any control over his fiscal and monetary policy, as their are decided by the eurocrats of the European Commission and the European Central Bank. And the crazy policy of favouring a strong Euro is extremely unfit for the Italian economy.

One must say also that he did put forth some badly needed "structural reforms" such as the reform of labor market and the reform of the pensions system. He also cut income taxes, but for a minimum amount and starting with low-income taxpayers.

BUT he failed to do such conservative things as cutting public spending, privatizing the public utilities companies and deregulating the economy. As a result, Italy is still a much socialist and regulated economy and she cannot stand the competition from China and India.

As an Europenan, I must say that I envy the business-friendly environment of the American economic system.

[I still care]

Italy is a beautiful country.

I was wondering if some of the problem might also be due to declining population?

[maestro]

This has NOTHING to do with the King or the Pope......

.....move on......

[CROSSHIGHWAYMAN]

Calling Dr. Arthur Laffer.........

HELPO!!!

[Brilliant]

Why is Italy going into recession right when the rest of the world is coming out?

[YOUGOTIT]

The problem is the EU. The left-wingers who have taken over the EU are pushing for a Socialist dictatorship. But Italy is still not is as bad a shape as Germany. One can only hope that Italy can pull itself out of this and continue to support the United States. Population decline might just be a problem as Italy is overrun my illegal immigrants. (from north Africa, Islamic, and from the Arab countries and even the Philippines)

[Brilliant]

In the light of the new data, the E.U. Commission is stepping up the pace of its inquiry into Italy’s accounts as it prepares to propose infringement procedures in June. The weakness of the Italian economy is now viewed as being “structural”, not contingent."

I think this is Mumbo-Jumbo for "it's not our fault."

[a freedom-loving italian]

Well we compensate the declining population with plenty of immigrants from African countries so at this very moment this is not a big problem.

Of course in the long run this is THE PROBLEM...

[a freedom-loving italian]

But Italy is still not is as bad a shape as Germany

Well that's true, after all Italy has a 7,8% unemployment rate versus 12% in Germany. But the sad true is that Italian middle class is getting poorer and poorer: thanx to the Euro, prices have risen up to the level of Germany while wages HAVE NOT.

[a freedom-loving italian]

This has NOTHING to do with the King or the Pope......
.....move on......

What? Can you rephrase that pls???

[Apple Pan Dowdy]

I am sorry to hear that your economy is in such trouble. But happy to tell you that I am taking a trip to Italy in August and will be spending some of those American dollars (they are still "solid"... well for the time being, and if we can just keep conservatives in the white house and congress they might stay solid).

I am looking forward to seeing Italy. We are flying into Rome and doing a 14 day tour of Northern part of the country, ending up in Milan. I know this is off topic for the thread... but is there any wonderful place you want to tell me to be sure and not miss seeing? Advice appreciated!!

[SAJ]

Damned right it's ''structural''. The structure of almost all the original ESSR member nations' economies is proto-socialistic in nature, and a thoroughly rotten structure it is, too.

Too bad, really, that there's not a hope of climbing out of their self-created economic and moral quagmire...well, short of a revolution here and there.

[a freedom-loving italian]

Why is Italy going into recession right when the rest of the world is coming out?

IMHO there are two main causes

1) Italy is competing in the same markets as China like the textile, shoe-making, furnitures, etc... In these markets the strong Euro is badly damaging Italian exports.
2) the adoption of the Euro in Italy has determined a big jump in the level of prices with this result: prices have reached a "German" level but wages have not. Hence the middle class is getting poorer and poorer and there is a feeling of creeping pessimism about the future.

But here we are talking about the short run. In the long run a strong deregulation of the economy is badly needed in order to avoid a creeping decline.

[ScaniaBoy]

Hi guys,

You still don't understand Eurospeak. This was the operative sentence:

Paradoxically, this eases Italy’s problems with the European Union, because recession is considered an eminently valid mitigating factor to justify backsliding on public accounts.

This just may give Berlusconi the possibility to further increase the budget deficit, pour out some more subsidy to relevant sectors of the population, and win the election.

Machiavelli was Italian, you know...

[Nyboe]

The socialist EU is gonna drag the entire continent into depression.

Socialism doesn't work.

[a freedom-loving italian]

Sadly true.

[CROSSHIGHWAYMAN]

Hi guys, You still don't understand Eurospeak. This was the operative sentence:

You are correct.

I will never understand the European loser mentality that repeats the same mistakes over and over.

My son will not be sent to save their asses next time!

[Brilliant]

The EU still controls how much he can do, though. And you can bet it won't be enough.

[ScaniaBoy]

You shouldn't, but I hope that you'll keep your doors open for those of us who is fighting, and will fight on to try to reverse the trend that is now so patently obvious, if at the end of time we would need a refuge to be able to continue our fight.

The EU is turning into not only an economic fiasco but politically an authoritarian entity, and history has taught us were that combination leads.

[Koblenz]

How fast is Italy's population, or at least its labor force, declining? They've got negative population growth. Hard to grow your economy with fewer working age people each year.