Labour productivity of large euro area countries drifts apart – Italy falling behind

In the last 20 years, productivity growth has been very modest in Spain and especially in Italy. Structural problems afflicting the Italian economy make it difficult to increase productivity. Regulatory burdens encumber the growth of small, private-sector companies. Reforms aimed at improving public administration efficiency could accelerate the growth of small firms. Larger enterprises often invest more in research, attract more foreign direct investment and thus benefit from spillover effects and other economies of scale. Appropriate reforms would trigger a process culminating in greater productivity and growth. This would simultaneously increase convergence in the euro area and facilitate political coordination on issues such as joint monetary policy.

Labour productivity of large euro area countries drifts apart – Italy falling behind(PDF, 134 KB, non-accessible)