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02/01/2013 01:56 PM
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Maybe that's the problem , Italy is governed by Rome,
now a remote city in the south of Europe.
Milan is far nearer to the heart of Europe and at the centre of Italys commerce.
It would be like Britain being ruled from Aberdeen.
In Classical times Rome was the centre of the world, but
times have changed.
Italy has been the eurozone’s most sluggish economy for more than a decade and is at the forefront of the debt crisis, with borrowing costs bordering levels seen unsustainable over the long run.
Investors have become increasingly concerned about Italy’s ability to bring down public debt of around 123% of output – a mood that threatens to spill further into the bloc.
Monti passed austerity measures worth more than 20 billion euros at the end of last year to head off a mounting debt crisis but the package, made up largely of tax hikes, sapped consumer morale and deepened the recession.
The austerity measures are obviously weighing on the economy.
“Investments and consumption, both private and public, are the hardest-hit areas.”
“There is no sign of any change of trend for Italy,” said Intesa Sanpaolo analyst Annamaria Grimaldi, who forecast there would be no return to growth in the eurozone’s third-largest economy until “well into 2013”.
With Italian benchmark bond yields still stubbornly close to 6%, Monti has repeatedly warned his European partners that unless they show flexibility towards Italy on public finances, the country could soon be run by a eurosceptic government with little commitment to fiscal consolidation.
There is concern about growing anti-euro, anti-German and anti-EU sentiment in the parliament in Rome.
“I’ll stay in office if all goes according to plan until April 2013, and I hope that I can help rescue Italy from financial ruin with moral support from some European friends, especially Germany,” Monty said.
Monti, whose popularity has plunged from record high levels soon after he took office, has said he will not seek to remain in office after a national election due spring 2013.
ISTAT gave no numerical breakdown of GDP components with its preliminary estimate, saying only that activity contracted in agriculture, industry and services.
This means that if GDP posts flat quarterly readings in the final two quarters of 2012, over the whole year it will be down 1.9% from the previous year.