Can pandemic recovery plan end Italy's years of stagnation?
MILAN (AP) — The COVID-19 pandemic hit Italy especially hard, killing more than 127,000 people and sending the European Union's third-largest economy into a devastating tailspin.
Yet out of that tragedy may come solutions for decades-old problems that have held back growth and productivity — and with them, a new sense of stability for the euro, the currency shared by 19 of the European Union's 27 members.
Backed by 261 billion euros from the EU and Italian government, the country's plan for recovering from the pandemic calls for a top-to-bottom shakeup of a major industrial economy long hampered by red tape, political reluctance to change, and bureaucratic and educational inertia.
Leading the charge is Premier Mario Draghi, the former head of the European Central Bank, who was tapped as head of a national unity government specifically for his economic expertise and institutional knowledge both in Italy and the EU.
The challenge is formidable: Italy has failed to show robust growth in the more than two decades since it joined the euro currency union in 1999.
Execution of the recovery plan remains a risk given Italy’s often-fractious politics. But “if they succeed with even half, it will have a big impact,” said Guntram Wolff, director of the Bruegel think tank in Brussels.
A key target is keeping more young Italians from taking their know-how abroad, a perennial issue in Italy, which has one of the lowest rates of university graduates in Europe and one of the largest brain drains.
The plan aims to create eco-systems that would help scientific discoveries find their way into the market place, fueling startups and industry while creating career paths that would help retain educated Italians, many of whom leave home due to low pay and limited prospects.