For more than two decades, the
Italian economy has failed to grow, mainly due to lagging
productivity, Bank of Italy Governor Ignazio Visco said Tuesday.
"For 20 years and more, Italy has not been growing, and the
main influence is productivity," Visco told an economics event
in the country's north.
Italian debt was hit hard by the global economic crisis
because governments "had not lowered the debt when they could,"
he said, citing that a significant opportunity lost.
He noted that Italian individuals do not have high levels
of private debt, but sovereign debt levels have consistently
rose.
Meanwhile, the devastating global financial crisis grew
from errors made well before it erupted in 2007.
That crisis was "generated by errors in various fields",
from markets and regulators to bank supervisors.
But lessons have been learned from those mistakes, added
Visco.
And deregulation in the financial sector has had the
positive effect of expanding markets, he said.
But "instability and social inequality" remain significant
problems.
Visco meanwhile said that bank reforms, which are being
proposed by the government of Premier Matteo Renzi, could be
important for the economy.
Credit and lending has been "immobilized" and that must be
unlocked.
"Today, most of the business financing comes from other
sources," he said.
"A company that has to grow and invest in prospects with 10
and 15 years must seek funds on the market," which is not always
possible.
Banks instead must "have access to market capital," he
added.
At the same time, bank mergers must also be possible, he
said.
One measure of the continued weakness in the Italian
economy has been persistent deflation in the overall rate of
inflation.
That has suggested sluggish demand for Italian goods and
services.
Indeed, for the third consecutive month, Italian inflation
was negative in April with a rate of -0.1% on a year-over-year
basis, the Organization for Economic Cooperation and Development
(OECD) said Tuesday.
Its figures matched earlier reports from Italy's national
statistics agency Istat.
The OECD calculated that in the eurozone overall, the
consumer price index was stable in April after a drop of -0.1%
in March.
It said that in France and Germany inflation has risen from
-0.1% to + 0.1%, and from 0.3% to 0.5%.
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