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

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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
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Contents

• Relevant measures 2008-2011
• Main effects
• The decree Save Italy expected effects
• Conclusions

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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)

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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)

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MAIN EFFECTSGDP, PRIVATE CONSUMPTION, EMPLOYEES
Fonte ISTAT
GDP, Private consumption real
percentage changes
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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
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Consumption

• Poverty has increased
• Disposable income and saving propensity

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Employment
People seeking employment
10
Employment
Redundancy Fund CIG (million of authorized
hours)
Ordinary Extraordinary IN DEROGA Total
2005 142 90 13 246
2006 97 111 24 231
2007 71 88 25 184
2008 113 87 28 228
2009 576 216 122 914
2010 342 489 373 1.204
2011 226 411 316 954
Source INPS
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Unemployment rate Total and people 15-24 years
old
Source ISTAT
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Wages and inflation rate. Percentage changes on
previous quarter
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Effects of the Save Italy decree
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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

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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