Italian industrialists see recession at an end
But political instability 'worrying'11 September, 18:53
In a report from its research centre, Confindustria said the July-to-September period is seeing the end of contraction for gross domestic product (GDP), with a green shoot of 0.3% growth. The economy has arrived at a "turning point", although Confindustria foresees "slow" recovery.
"In fact, domestic and international risks persist, as well as obstacles, on the road to recovery...Political stability is crucial," the report underlined, alluding to the looming collapse of the Italian government over ex-premier Silvio Berlusconi's political future. A Senate panel is scheduled to reconvene hearings Thursday over whether to continue deliberating the fate of his seat in the upper house after the supreme court last month gave him a binding conviction for tax fraud, his first ever in nearly 20 years of legal entanglements. If the panel votes to ratify the subsequent ban from office, which kicked in due to a 2012 anti-corruption law, the media mogul's center-right People of Freedom (PdL) party has vowed to pull its support from the executive it co-governs with the center-left Democratic Party (PD), possibly forcing snap elections for the second time this year. The head of Confindustria on Wednesday expressed concern about the country's exceedingly fragile political situation.
"Above all, there is a need for stability," Confindustria President Giorgio Squinzi said. "The situation is very worrying". For now, both partners in the unprecedented left-right alliance have agreed to delay a showdown, prolonging discussion on the panel which is now expected to take about a week to reach conclusions on the tangled legal arguments being deployed.
Government instability has plagued the Italian economy throughout the euro crisis, forcing yields on State paper to fluctuate erratically according to investor confidence. The spread between Italian 10-year bonds and the ultra-stable German bund, seen as a key indicator of international confidence in Italy's ability to whether the crisis, soared above 500 points at the end of 2011 when then-premier Berlusconi was forced from office in a no-confidence vote and eventually replaced by technocrat economist Mario Monti. His austerity measures and economic reforms drove the spread down below 300 by the time his government was toppled late last year when Berlusconi's party, the biggest in parliament at the time, pulled its support. That move forced snap elections in February that yielded inconclusive results and two months of political gridlock, which ended when the current grand-coalition executive was forged with Enrico Letta from the PD as its premier. At the close of trading Wednesday, the spread was 248, down two points from Tuesday. That and other positive trends such as Confindustria's take on the recession signaled an "optimism that has been hard to find" in recent months, Economy Minister Fabrizio Saccomanni said Wednesday. But, he added, the country's political instability continues to be "a problem for which (the economy) is paying".