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THE IMPACT OF ANTI-CRISIS MEASURES, AND THE SOCIAL AND EMPLOYMENT SITUATION: ITALY

THE IMPACT OF ANTI-CRISIS MEASURES, AND THE SOCIAL AND EMPLOYMENT SITUATION: ITALY. Elisa Borghi, Università Carlo Cattaneo – LIUC KITES- Università Bocconi. European Economic and Social Committee Group II Extraordinary Meeting Brussels, 28th February 2012. Contents.

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THE IMPACT OF ANTI-CRISIS MEASURES, AND THE SOCIAL AND EMPLOYMENT SITUATION: ITALY

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  1. THE IMPACT OF ANTI-CRISIS MEASURES, AND THE SOCIAL AND EMPLOYMENT SITUATION: ITALY Elisa Borghi, Università Carlo Cattaneo – LIUC KITES- Università Bocconi European Economic and Social Committee Group II Extraordinary Meeting Brussels, 28th February 2012

  2. Contents • Relevant measures 2008-2011 • Main effects • The decree ‘Save Italy’: expected effects • Conclusions

  3. Introduction: the crisis Quarterly GDP (growth rate)

  4. Relevant measures 2008-2011 • November 28th, 2008 Anti-crisis decree(35 articles providing for an economic recovery package amounting to €6.4 billion) • Extraordinary bonus to families • Fund for Employment and Training  • Tax relief on productivity bonuses (extension) • Social Card • Urgent measures approved in 2009 • Decree 5/2009, 10th February 2009 • Decree 1st July 2009 n.78 • Law n.121/ 3rd August 2009 • Budget Law 2010 (December 2009)

  5. Relevant measures 2008-2011 • May 2010 – “Urgent measures for financial stability and economic competitiveness” • Budget Law 2011, December 2010 • Measures for financial stability: • July 2011, n. 98/2011 and 111/2011 • August 2011, n. 138/2011 • December 2011 ‘Save Italy’ decree (201/2011)

  6. MAIN EFFECTS:GDP, PRIVATE CONSUMPTION, EMPLOYEES Fonte: ISTAT GDP, Private consumption: real percentage changes

  7. Household confidence index. Estimated effect of a reduction of 10% of this index reduces consumption of 0.5% with an effect on GDP of -0.3% Source: ISTAT

  8. Consumption • Poverty has increased • Disposable income and saving propensity

  9. Employment People seeking employment

  10. Employment Redundancy Fund – CIG (million of authorized hours) Source: INPS

  11. Unemployment rate Total and people 15-24 years old Source: ISTAT

  12. Wages and inflation rate. Percentage changes on previous quarter

  13. Effects of the ‘Save Italy’ decree

  14. Conclusion • Italy has been severely hit by the crisis in terms of employment and social conditions • Fiscal policy: mainly increases in taxation • Spending cuts can worsen families’ economic conditions, particularly poorest ones. • High indebtedness and contagion of the sovereign debt crisis makes the trade-off between stimulus and austerity more severe

  15. Conclusions • Urgent measures prevented the introduction of structural interventions fixing the weaknesses of the Italian economy. • Increases in taxation contribute to the reduction of disposable income and consumption, leading to an increase in poverty. • Spending cuts, in particular of health care expenditure and of transfers to regions, have a greater impact on poorest families. • Worse labor market conditions during the crisis and structural weaknesses become more evident. • To overcome the crisis, structural reforms are needed: the ‘grow Italy’ decree

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