Global Insider: Italy’s Reforms Seek to Boost Competitiveness

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.

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