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“Italy’s growth is accelerating, we are getting out of a diabolical trap,” says Economy Minister Padoan to US investors

by Carmine Fotina

Italian “growth is accelerating,” bucking the trends in the rest of the world, according to Economy Minister Pier Carlo Padoan. Speaking at a conference on foreign investment organized by the American Chamber of Commerce in Italy, Padoan cited a global economic landscape where “the rate of growth is slower than had been imagined, with all major institutions cutting forecasts — and that obviously impacts a nation with a free and open market like Italy.”

Yet Italy’s growth is accelerating “thanks to internal demand,” he said. “Consumption and investments are both picking up.” Padoan said the nation “is emerging from a diabolical trap that has frozen economic growth for 20 years.”

The uptick should not just be linked to an economic cycle: Italy “isn’t only emerging from a deep recession but must also shake off structural impediments” that have long thwarted growth, the minister said.

Paodan cited a series of reforms implemented by the current government, “which are having their first tangible effect on the labor market” and initiatives like the so-called Finance for Growth program that seeks to boost investment and is already showing results.

He stressed that the government is walking “a very fine line” between the need to sustain growth on one hand and, on the other, “strict adherence to fiscal discipline.”

Within these margins, he assured the assembled group of US investors, Italy is continuing to encourage measures to simplify its “business climate” — for example, in terms of dealing with the tax administration, and enhancing “cooperative compliance.”

Padoan said he’s talking about real change with economic policy shifts that will take effect in the medium term. Italy “can’t just return to a cyclical recovery. It must attack the structural causes of its weakness, and it’s doing that. The results will be evident not in a few decades, but in a few years.”

Padoan’s speech was the keynote of the morning dedicated by AmCham to foreign investors and Italy-U.S. bilateral relations.

Giorgio Squinzi of Mapei Group — and chairman of Group 24 Ore which owns ItalyEurope24 — focused on the work still ahead.

“This recovery that’s so often mentioned isn’t due to any particular skill of ours but to external factors, mainly the drop in oil prices, the euro-dollar exchange rate and quantitative easing. Structural reforms are needed. We’ve simply gotten things moving, not much more than that,” said Squinzi, the outgoing chairman of Confindustria.

Donato Iacovone, EY CEO in Italy, which co-authored a report on Italy-U.S. trade with AmCham and the Legance law firm, said that “what’s needed is a nation that’s better at retaining and attracting talent.”

“We need to showcase the quality of Italy’s workforce, in particular our excellence in scientific research, and at certain institutions like the Polytechnic institutes in Milan and Turin and the Normal and S. Anna in Pisa.”