Italy’s chronically disastrous economic performance will inevitably lead to another crisis

Data for the first half of 2019 confirm that Italy is growing at a rate of more or less zero, despite the increase in its fiscal deficit. The main causes of Italy’s zero growth are well known: Chronic underinvestment and low labour force skills, leading to a lack of productivity gains and to hiring difficulties despite very high unemployment; Inability to control wage increases, leading to insufficient corporate profitability - hence the weak investment, especially as Italian banks are in no state to lend - and to declining cost competitiveness, resulting in market share losses and deindustrialisation; Excessive i nterest rates - even though they are low - given the sluggish growth , because of the poor state of public finances. As long as labour force skills have not improved, wages have not adjusted downwards, the situation for banks has not improved and fiscal solvency is not ensured - all of which may never happen - Italy’s growth will remain zero, which points to a future economic and political crisis.