The head of Confindustria, Italy’s leading business group, has slammed Prime Minister Silvio Berlusconi for failing to revive the country’s sluggish economy.
At the employers’ association’s annual assembly, business leaders cheered Mario Draghi – who is set to be the next head of the European Central Bank -and listened as Confindustria’s president, Emma Marcegaglia, demanded reforms.
She said: “Italian economic policy must be guided by two priorities – stability of public finances and economic growth – and they must be tackled together. We want administrative rules to be simplified quickly, we want new infrastructure immediately and tax reform. This is what we are asking for!”
Marcegaglia said Italy needed more liberalisation and less state intervention to kickstart its economy: “The fact is that growth is not at the top of the national agenda because politicians have other things on their mind.”
Italy’s economic growth remains sluggish at 0.1 percent in the first quarter of this year – compared to a 1.5 percent surge in Germany and a 1.0 percent rise in France. It is projected to be 1.1 percent for the whole year.
The deficit is a relatively low 4.5 percent of gross domestic product but there is high level of public debt to GDP at 120 percent.
The International Monetary Fund and the Organisation for Economic Cooperation and Development have both recently said that Italy’s economy is recovering slowly but will need major structural reform to boost its growth potential.
Marcegaglia warned that a failure to boost growth could lead to wider social problems and rising populism.
She urged reform of labour market laws along the lines of those undertaken in Germany, to increase flexibility and help Italy catch up.