Le laboratoire italien en panne

The first and a half year of term of the new right-wing government in Italy translated neither into the « second economic miracle », announced during the campaign, nor into the reforming momentum impressed by the previous left-wing coalition. The policy-mix counting on keynesian revival of domestic demand and on supply-side policies, failed to improve the sluggish economic situation. The announcements of tax amnesties and incentives, aimed at feeding a virtuous circle which would amplify the effects of economic policy, proved ineffective. Their lack of credibility and their inability to dissipate uncertainty favoured saving rather than investment and consumption. No progress in structural reforms was made. Further tax reform is now constrained by a restrictive fiscal stance, while a more comprehensive reform of welfare is no more among government priorities. Growing conflict with labour unions hindered labour market and pension reform.