Secular Café: Italy: economy in nosedive

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Italy: economy in nosedive Sep 6th 2012, 07:55 Miners in Sardinia staged an underground occupation and protest to prevent closure of their mine. The result was a stay of execution. http://www.spiegel.de/international/...-a-853907.html Quote: Only on Monday did they end their protest after the government in Rome agreed to continue subsidizing the mine for the time being. But, they said, they are determined to continue their fight should it become necessary. Their resolve is not difficult to understand given the complete lack of other jobs available to them. Sardinia has an unemployment rate of 16 percent, with some 1,800 jobs are lost on average each month. Among Sardinians between the ages of 18 and 24, the jobless rate will soon rise above 40 percent. Apart from a few regions in Italy's far north, the situation is similar across much of the rest of the country. Some 1.5 million jobs have disappeared in the last five years, with younger job seekers bearing much of the burden. Fully 35 percent of those under the age of 24 in Italy don't have work. And the trend remains negative. Even those who have jobs aren't free of worry, given that short-term, limited contracts have long since become more numerous than traditional permanent positions. And full-time jobs are disappearing, with 400,000 of them having been axed since 2008. The part-time positions that have replaced them often don't pay enough to live on, particularly given that inflation in Italy stands at 3 percent and purchasing power is dropping by the month as a result... ...Italy's economic misery becomes apparent from just a few indicators. Twenty years ago, the country's productivity was roughly 5 percent below that of its European partners. Today, it is 12 percent lower than the average EU level. Labor costs, however, have climbed more rapidly than average -- at a rate of over 3 percent each year. The result is that production in the country has become increasingly expensive. Luxury goods companies haven't suffered dramatically, but others have, with many going bankrupt. There are, however, many other significant problems. Bureaucracy in the country is infamous, a problem which often inhibits investment. The legal situation is atrocious, with courts taking years, sometimes even decades, to reach a verdict. Italy's infrastructure is likewise in a sorry state. And recent austerity measures, which have included significant tax hikes, mean that the tax burden can be as high as 45 percent. Foreign investment, not surprisingly, has suffered.

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