December 2011

CEP Default Index Country Report Italy – 1st half of 2011

There was a significant acceleration of the erosion of Italy’s creditworthiness in the first half of 2011 due to an increased need for foreign credits. Without fundamental and fast acting reforms, the erosion of Italy’s creditworthiness will soon result in insolvency.

Reform Prospects

Italy’s unit labour costs have grown by 30.5% since 1999, German’s by 5%. The difference of 25.5 percentage points indicates a gap in competition. This gap must be bridged by a cut in workers’ salaries. Supportive measure must be the liberalisation of labour and goods markets and the consolidation of the public budget.

CEP Documents