Italian Prime Minister Mario Monti approved major changes to the country’s labor laws last month, the latest of Italy’s attempts to overhaul its economy. In an email interview, Carlo Bastasin, a visiting fellow at the Brookings Institution who focuses on European politics and economics and author of "Saving Europe," discussed Italy’s economy.
WPR: What have been the major weaknesses of the Italian economy, with regard to its European and non-European trade partners?
Carlo Bastasin: The two features that have distinguished the Italian economy are the high level of public debt and the low growth of the past 10 years. The two problems are interconnected: The fiscal position has been a drag on growth as it has necessitated a very restrictive budget policy, but at the same time the low level of activity makes it more difficult to produce the stream of fiscal revenue that makes a public debt sustainable.