Following the Italian electorate’s resounding rejection of a constitutional reform package in December 2016’s referendum, further uncertainty beckons for the country’s fragile economy. This begs the question: can Italy’s sluggish growth be lifted by European financial institutions, including the European Central Bank?
In an article for FTSE Global Markets, Natixis’ chief economist, Patrick Artus discusses how the nature of Italy’s troubles, characterised by declining competitiveness and productivity, renders any assistance from European institutions largely redundant.
With this in mind, Artus argues the perpetual focus on the country’s banking crisis is detracting attention from addressing the country’s poorly-performing labour market – an economic challenge that can only be resolved from within. As such, Artus believes that, “As long as this neglect continues, Italy could remain the sick man of Europe.”
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