A Crisis Unfolds in Italy!!

A Crisis Unfolds in Italy!!

Italy, once rode high as the second-largest manufacturing hub in Europe, held the position of the third-largest national economy in the European Union and the eighth-largest globally by nominal GDP. It proudly claimed the eighth-largest exporter status worldwide and secured numerous top 10 spots both in the EU and on the global stage. Italy now, faced with an ageing population and billions in debt. Italy is sinking….

#italy #economy

Thanks for watching! 👀
Enjoyed the video? Hit the Like button and Subscribe! 👍

Sources:
https://www.politico.eu/article/italy-pm-giorgia-meloni-big-budgets-slow-growth-eu/
https://www.washingtonpost.com/business/energy/2023/06/20/italy-s-not-the-economic-basket-case-you-thought/dcdc9036-0f21-11ee-8d22-5f65b2e2f6ad_story.html
https://www.elibrary.imf.org/view/journals/002/2023/274/article-A001-en.xml
https://www.coface.com/news-economy-and-insights/business-risk-dashboard/country-risk-files/italy#:~:text=Italy%20has%20the%20highest%20public,it%20exposed%20to%20speculative%20attacks.
https://www.statista.com/topics/8379/aging-population-of-italy/#dossier-chapter3

Italy once rode high as the second largest manufacturing Hub in Europe held the position of the third largest national economy in the European Union and the eighth largest globally by nominal GDP it proudly claimed the eighth largest exporter status worldwide and secured numerous top 10 spots both

In the EU and on the global stage now faced with an aging population and billions in debt Italy is sinking so what exactly is the problem with Italy’s economy and that is their set to GDP level currently sitting at around 150% the second highest in the Euro third

Time in a decade Italy’s economy has slipped into recession now the European commission has warned Italy it will launch disciplinary steps over the country’s growing debt the tale unfolds with Italy grappling through economic crises from the inflation turbulence of the 1970s to the public debt wo in the

Early 80s resulting in an unemployment rate of 7.37% this was followed by currency volatilities in the 9s and the Global Financial meltdown in 2008 the sovereign debt crisis further intensified the challenges despite this tumultuous history Italy managed to weather the storms displaying a knack for survival however the current scenario

Paints a different picture as Italy faces an existential crisis that looms not just over its own economy but casts a shadow on the entire European Union so why is Italy the land of art culture and pasta constantly making headlines for economic woses let’s rewind and explore in the

Post World War II era Italy experienced an economic Miracle a rebound from the devastation of War while other nations grappled with aftermath Italy flourished attributing its growth to various factors particularly in the agricultural sector between 1945 and 1990 agricultural GDP surged at an average annual rate of 4.5% reaching a peak of

6.8% in the 19 1950s during this period olive oil production soared from 120,000 to 450,000 tons while wine production doubled government initiatives such as land reforms bolstered smallscale farming the sector’s employment Rose significantly absorbing a quarter of the workforce in the 1950s the decline began to gain momentum

In the oil induced turmoil of the 1970s and by 1999 Italy’s productivity plateaued signaling the end of its economic Miracle the nation however failed to Pivot towards new sources of growth leaving it vulnerable when the Winds of the economic Fortune shifted the excessive Reliance on a fading

Miracle turned out to be a curse as Italy found itself ill prepared for the challenges that lay ahead enter the Spectre of debt Italy ranks among the most indebted Nations globally with combined private and public debt surpassing a staggering 330% of his GDP studies indicate that when the total

Debt to GDP ratio surpasses 300% economic growth begins to falter the cost of living sores and the standard of living takes a nose dive Italy exceeding this ominous Benchmark by 30% has witnessed a sharp decline in economic growth since crossing the 300% threshold around 2010 for perspective consider

Greece which faced a similar debt burden in 2012 nearly causing a collapse in the European Union the repercussions still linger in some member countries a decade later Italy now in a similar precarious position navigates an existential crisis that reverberates Beyond its borders it must be noted that in the 70s and early

80s Italy’s economy exhibited immense potential boasting an average growth of 5.3% however the weight of massive indebtedness and a fading economic Miracle has Unearthed deeper issues one glaring symptom is the significant reduction in Italy’s working population exacerbating the challenges faced by its economy the average GDP growth turned

Negative in 2010 and over a decade later signs of a Resurgence remain elusive now for an economy to thrive it relies on a robust working age population typically between 15 and 64 years old this demographic actively contributes to economic growth through work consumption and taxable income however Italy faces a

Critical challenge as its working age population is dwindling leading to fewer workers lower income and consequently reduced government tax revenue this wasn’t an Abrupt occurrence Italy had been grappling with technological and physical Aging for decades reaching a Breaking Point in 2012 in an attempt to tackle the situation the Italian

Government had even appointed a minister for families birth rate and equal opportunities however according to Italy’s National Institute of Statistics the situation is only set to get worse according to Sabrina prti director General at istat the imbalance can be measured by by comparing the number of people over 65 and the younger

Population between now and 2050 we expect this number will grow to 297 people over 65 per 100 young people under 15 you might be wondering why did this happen well in the late’ 60s and early ’70s a trio of transformative events unfolded economic Prosperity paved the way for substantial State

Pensions the influence of religion waned and crucially the widespread availability of the contraceptive pill empowered women to prioritize education and careers over childbearing the consequence a sharp decline in annual birth rates improved healthc care further contributed resulting in more people reaching old age the outcome a shifting demographic landscape with

Fewer children and a growing elderly population leading to a steadily Rising average age the economic equation becomes Stark Italy holds trillions in debt with minimal tax revenue to sustain and repay it this balance worsens the nation’s economic challenges overcoming this economic slump is now even more daunting given the shrinking Workforce

Potential Solutions lie in government interventions such as easing immigration restrictions a step that has become more apparent in the last 2 years political instability further compounds Italy’s economic wos a ripple effect of global inflation after the pandemic political unrest has become a pervasive issue worldwide Italy is no exception with its

Un able government poking more hes into an already leaking economic ship the country’s political turmoil escalated from the failure to form a stable coalition government in March 2018 a hung Parliament was voted in but prolonged negotiations and disagreements left Italy in a deep economic and political crisis attempts at Coalition

Governments including the five-star skeptic populist group and pro-establishment lawmakers proved futile the political drama continued with a series of prime ministerial resignations including jeppe K and eventually Mario dragi in July 2022 Italy found itself in a leadership vacuum as Mario dr’s second resignation a mere week after the first attempt left

The country without a leader until September 2022 in October 2022 following these general elections Italy made history by appointing its first female prime minister Georgia Maloney who remains in power as of making of this video Malone’s economic policy aim to revitalize Italy through a strategic allocation of 21 billion in budget

Adjustments These funds prioritize assisting Industries and families grappling with escalating Energy prices Maloney also introduced measures incentivizing couples to have more children and businesses to hire more women addressing Italy’s demographic challenges of low birth rates and an aging population notable policy changes include a 50% increase in the baby bonus

For the first year after childbirth extended benefits for families with over three children and improved conditions for women on extended maternity leave money’s focus on supporting Italian industry amidst the energy crisis and implementing socioeconomic initiatives for lowincome families underscores her commitment to fostering economic growth and social welfare these policies

Represent a departure from previous basic income and pension reform reflecting a distinct political shift in priorities did you know that Italy’s economic model heavily relies on family-owned businesses while the structure had its merits during the economic Miracle of the 70s and ‘ 80s Italy is now grappling with its consequences family-owned companies in

Italy often smaller and less productive than their European counterparts struggle to compete globally according to the European commission’s tracker a staggering 95% of businesses in Italy employ less than 10 people larger Enterprises have failed to innovate resisting modernization due to factors such as family ownership reluctance to change difficulty obtaining credit and

Poor management capabilities this lack of efficiency and productivity poses a serious threat and without intervention many of these companies May face obsolescence further exacerbating Italy’s economic turmoil another critical challenge is Italy’s education system widely considered by citizens as the third most significant issue behind poor business culture and Industrial stagnation the country’s highly

Centralized and unionized education system yields subpar results with over 70% of 25 to 34-year-old Italians holding a University degree Italian teenagers lag behind their European peers and science reading and maths the dysfunctionality of the system worsened by insufficient Government funding results in a high rate of school abandonment this cycle hampers

Modernization efforts stifles productivity and consequently hinders Italy’s ability to settle its debt and increase tax revenue the recurring pattern from the days of the economic Miracle to the current challenges is EV evident Italy has struggled to restructure its comparative advantage instead it resorts to borrowing to sustain its economy the pressing

Question now is how much longer Italy can continue this borrowing Trend with one of the highest debt profiles globally the mix of a poor education system and unstable government lagging innovativeness and an aging population collectively tightens its grip on the economy for Italy to rejuvenate a conscious policy revamp is imperative

Strategic investments in crucial areas particular L infrastructure and education are vital this deliberate effort is essential for Breaking Free from the long-standing challenges and setting the stage for Italy’s economic growth will the current government be able to handle the pressure only time will tell