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do you think that the euro is the only reason? If you ask people on the street the real reason behind Italy's fall is the rise of China, Italy used to have a lo

do you think that the euro is the only reason? If you ask people on the street the real reason behind Italy's fall is the rise of China, Italy used to have a lot of small manufacturing businesses, which are now pretty much gone or dying, and leading to the issues you are seeing with the GDP as well as contributing to the bank problems (small businesses can try to stay afloat with bank loans for a while) It also didn't help that when the Euro came in many, many, many shopkeepers repriced 1000 lire = 1€ (basically raising prices by 100%) which although I don't think was tied to GDP issues, it sure caused major pain for normal working folks.

rhaps0dy 10y ago
>many, many, many shopkeepers repriced 1000 lire = 1€ Maybe relevant, this also happened in Spain. 166 pesetas were 1€, but shopkeepers replaced 100 pesetas for 1€ instead.
sievebrain 10y ago
That may be the case but why does the change in direction of the graph line up with the Euro so neatly?
zakk 10y ago
> do you think that the euro is the only reason? No, it's not. It exposed some structural problems of the economy which could have gone unnoticed for, say, ten or twenty years. Italy has a very high state spending, which is not matched (as in e.g. Northern countries), by a very high level of state-provided services. The Italian state indebted itself by granting privileges in the 60s, 70s and 80s, notably in form of unsustainable pension, so that today's retired people are getting more money than they gave through taxes, creating more debt. This gigantic, bloated ship has been kept afloat by devaluating the currency (while we could) and by a high taxation. And, yes, the taxation level in Italy (red line) is inversely correlated to the increase/decrease of the GDP (in blue). http://i.imgur.com/0VgdH25.png http://i.imgur.com/0VgdH25.png On top of that civil justice is painfully slow and uncertain, bureaucracy is rampant, setting up a business requires tens of authorization and months. > If you ask people on the street the real reason behind Italy's fall is the rise of China, Italy used to have a lot of small manufacturing businesses I'm not sure about it. An embarrassing number big Italian brands has been sold abroad, so I don't think the dimensions of the business are a factor here. Italy it's simply no longer a good place to do business. If you can go abroad, you go there. Most new activities I see in my city are restaurants or retailers goods produced elsewhere.

rhaps0dy 10y ago

>many, many, many shopkeepers repriced 1000 lire = 1€ Maybe relevant, this also happened in Spain. 166 pesetas were 1€, but shopkeepers replaced 100 pesetas for 1€ instead.

sievebrain 10y ago

That may be the case but why does the change in direction of the graph line up with the Euro so neatly?

zakk 10y ago

> do you think that the euro is the only reason? No, it's not. It exposed some structural problems of the economy which could have gone unnoticed for, say, ten or twenty years. Italy has a very high state spending, which is not matched (as in e.g. Northern countries), by a very high level of state-provided services. The Italian state indebted itself by granting privileges in the 60s, 70s and 80s, notably in form of unsustainable pension, so that today's retired people are getting more money than they gave through taxes, creating more debt. This gigantic, bloated ship has been kept afloat by devaluating the currency (while we could) and by a high taxation. And, yes, the taxation level in Italy (red line) is inversely correlated to the increase/decrease of the GDP (in blue). http://i.imgur.com/0VgdH25.png http://i.imgur.com/0VgdH25.png On top of that civil justice is painfully slow and uncertain, bureaucracy is rampant, setting up a business requires tens of authorization and months. > If you ask people on the street the real reason behind Italy's fall is the rise of China, Italy used to have a lot of small manufacturing businesses I'm not sure about it. An embarrassing number big Italian brands has been sold abroad, so I don't think the dimensions of the business are a factor here. Italy it's simply no longer a good place to do business. If you can go abroad, you go there. Most new activities I see in my city are restaurants or retailers goods produced elsewhere.