italy needs to invest heavily in sustainable economic growth
News Posted On: 19 January 2010
Wall Street Journal columnist and Italian Corrado Passera has said that in order for Italy to get back on track to sustainable growth the government must invest 2-3% of GDP in the next five to seven years, and what's more it must make this "tough" investment without increasing public debt.
"It wouldn't be easy to fund such investments, and we will have to tap all possible sources: public funds already allocated but not yet spent, EU funding, private finance and capital as well as from efficiencies in public spending, addressing tax evasion, and sales of public assets," she said.
But the biggest problem Passera stressed, is the inefficiency of the government decision making process, which could easily prevent any of the problems that continue to confront Italy with a view to dulling economic growth, from being solved.
Meanwhile, the International Monetary Fund has said that the world's developed economies, like Italy could easily relapse if the economic stimulus is withdrawn too hastily.
“We have to be cautious because the recovery has been fragile,” IMF chief Dominique Strauss-Kahn said during a visit to Japan. He said pickups in employment and private demand should precede removal of such life support.
It seems obvious, that we must see significant improvement in the availability of jobs in the Italy and developed economies like it before the stimulus rug is pulled out from under the economy. However, the cost of the stimulus has really been felt, and 2010 is the year to count that cost. It seems from the outside that central banks are very keen to get out of stimulatory measures as soon as possible -- let's just hope that they don't do it too soon.
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