OCSE - Dal Rapporto sull’ Italia
Italy,
along with 19 other countries, signed the Convention founding
the Organisation for Economic Co-Operation and Development on 14
December 1960, thereby pledged its full dedication to achieving the Organisation’s
fundamental aims.
What does the permanent delegation do?
Like all 30
member countries,
the Italian government maintains a permanent
delegation to the OECD,
composed of an ambassador and
diplomats. As a member of the Council, Italy's ambassador, in
consultation with his peers, agrees the programme of work which
is described in the annual
report, validates strategic
work and
establishes the volume of the annual budget, contributions being
assessed according to the relative size of each country’s economy.
Members of the Italian Delegation monitor the work of the OECD’s
various committees as
well as the activities of the Development
Centre,
the European Conference of Ministers of Transport (ECMT),
the International Energy Agency (IEA),
the Nuclear Energy Agency (NEA)
and the Sahel
and West Africa Club,
of which Italy is a member.
Delegations thus play a vital communication role in providing liaison
between the OECD
Secretariat and
national authorities. They represent their governments’ positions in
multilateral negotiations, indicate areas in which their governments
seek OECD expertise and endeavour to help disseminate OECD
recommendations in their respective countries. In doing so, they ensure
that there is a good fit between OECD work and the issues of concern in
their country.
What are the benefits of OECD
membership?
The benefits for countries are many. Through its country surveys
and comparable
statistical and
economic data, the OECD provides its member countries tools with which
to analyse and monitor their economic, social and environmental
policies. Countries can draw on the OECD’s reservoir of expertise,
including peer
reviews,
and they can access all of the research and analysis conducted by the
Secretariat. Covering the full economic and social spectrum, this work
could not be carried out by any one country alone.
In addition to its economic intelligence functions, the OECD is above
all a forum within which countries can discuss and share national
experience, identify best practices and find solutions to common
problems. The OECD having working relationships with over 70
non-member economies,
members benefit from dialogue and consultations with all players on the
world scene, in a context of increased
interdependence that
demands global rules of the game.
Economic survey of Italy 2007
Contents | Executive summary | How to obtain this publication | Additional info
Published on 4 June 2007. The next Economic
Survey of Italy will be prepared for 2009.
Bookmark this page:
www.oecd.org/eco/surveys/italy.
An Economic Survey is published every 1½-2 years for each OECD country. Read more about how Surveys are prepared. The OECD assessment and recommendations on the main economic challenges faced by Italy are available by clicking on each chapter heading below.
Chapter 1. Italy’s key challenges
The Italian economy rebounded significantly in 2006. Growth has remained
well above its potential rate, also entailing a sharply lower public
deficit. The main motor has been strong foreign demand and an evident
adjustment process among Italian exporters that has allowed them to
benefit from the better external conditions. Even so, Italy’s export
structure remains heavily biased toward low skill production, hence
highly exposed to cost competition by emerging market economies in the
present era of globalisation. The process of deindustrialisation has
also not triggered a take off in services sectors, as in some of the
more successful OECD countries. This macro-structural weakness can be
traced to a lack of total factor productivity growth, reflecting the
shortcomings in efficiency, process and product innovation. A main
policy challenge is to raise human capital and market competition to
spur both the supply and demand for innovation and skills, imparting
needed dynamism to the economy. Employment creation has been a main
bright spot in the economy, but needs to go further by rebalancing
employment protections to reduce labour market duality. A large regional
gap and still low formal labour market participation may be part of the
current problem but are the source of significant unrealised growth
potential. Reducing the drag of fiscal policy on the economy will
involve sustaining a rapid pace of consolidation beyond the current
upswing, while also raising spending quality to allow lower spending and
tax-to-GDP ratios.
Chapter 2. Enhancing competition and productivity in
services
Italy has experienced a marked slowdown in productivity growth since the
mid 1990s. While it is not entirely clear what caused this slowdown, it
is likely that insufficient product market competition played a key
role. Hence, the two recent waves of liberalisation are welcome. These
reforms are not only likely to reduce entry barriers and rents in a
number of services sectors, but could also positively impact on other
industries. Yet there is still scope to strengthen market forces. For
instance, implementing new competition bodies at local levels, driven
primarily to protect consumers’ interest, could be a key factor to
stimulate the retail and wholesale trade sector and improve transparency
in local public utilities. As well, Italy needs more competition in the
financial sector so as to spur innovation and productivity; in this
respect, recent reforms in the banking industry appear promising.
Chapter 3. Achieving fiscal sustainability
Italy’s budget deficit contracted last year and further improvement is
expected to occur with the implementation of the 2007 budget. This is a
welcome development that results from both unexpected revenue buoyancy
and a greater degree of spending control. Nonetheless, the state of
public finances remains difficult. The public debt ratio is the second
highest in the OECD, with no sign of significant decline, making the
budget vulnerable to sudden increases in interest rates and changes in
market sentiment. Alleviating somewhat the risk to fiscal sustainability
is the moderate cost pressure from population ageing, but this still
requires the full implementation of measures to adjust pension benefits,
which have been approved but not yet fully put into place. Tax rates are
high compared to other countries, so that consolidation must come not
from new tax increases but from better spending control. Hence, there is
no other choice than decisive budgetary consolidation: the authorities’
goal of bringing back the primary surplus to the level prevailing at the
time of entry into EMU, namely 5% of GDP, is welcome; while it is
planned to reach this target by 2011, this should be possible ahead of
time considering recent strong fiscal outcomes. The first signs of
improvement recorded last year and expected this year are encouraging.
But the way ahead remains challenging.
Chapter 4. Making federalism work
Fiscal federalism can be an important complement to structural reforms
and budget consolidation. Empowering sub-national governments while at
the same time making them accountable to local citizens in the uses of
tax money could improve the allocation of public resources and promote
catch up of the lagging regions. Italy has launched itself in the
federalist direction by decentralising spending, regulatory and tax
powers in the late 1990s and reinforcing growing lower level
responsibilities with a constitutional reform in 2001. The constitution
has yet to be fully implemented, though, and the government has signaled
its intention to do so. A stronger focus should now be put on the
financing side, i.e. getting a better match between spending
responsibilities and taxing powers so as to boost local autonomy and
responsibility in line with the goals of federalist reforms. As the
lower levels are fully in charge of health and long term care, they will
face intense pressures due to population ageing which is especially
rapid in Italy, so that more tax bases should be devolved to them,
especially as pension reform has reduced such pressures on central
government. Redistributive mechanisms should be redesigned to improve
fiscal effort, and Italy must decide in that context to what extent it
can really afford to guarantee uniform national service levels – and
conversely, how much regional differentiation of services it will
tolerate in pursuit of higher efficiency. Framework conditions need to
be strengthened, notably accounting standards which need to be upgraded
and standardised. Fiscal discipline under the Internal Stability Pact
should be strengthened via better ex ante co-ordination and tougher
sanctions ex post.
How to obtain this publication
The Policy Brief (pdf format) can be downloaded. It contains the OECD assessment and recommendations but not all of the charts included on the above pages.
The complete edition of the Economic survey of Italy 2007 is available from:
SourceOECD for
subscribing institutions and many libraries
OECD Online Bookshop
for non-subscribers
OLISnet,
under "Publication Locator", for government officials with accounts (subscribe)
Accredited journalists (password required)
Additional information
Economic Surveys and Country Surveillance
Timetable of planned EDRC Meetings
OECD Economics Department homepage