RENZI GOVERNMENT: A COMPREHENSIVE STRATEGY FOR GROWTH

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1 RENZI GOVERNMENT: A COMPREHENSIVE STRATEGY FOR GROWTH RICCARDO MARIA MONTI Presidente ICE ICE Başkanı TURKISH-ITALIAN COOPERATION MEETING ISTANBUL October 7 th ST FDI ATTRACTION ROADSHOW THE ITALIAN GOVERNMENT 0

2000 and 2013 Problems: - lack of reforms; - weight of special

2 TWENTY YEARS OF SLOW GROWTH Italy had the best economic performance in Europe between 1950 to 1990 and the worst between 2000 and 2013 Problems: - lack of reforms; - weight of special interests and inefficient politics; - rigidities, bureaucracy, red tape. 1

consumption: +2.1% (July 2015/2014), best result since 2010 Export: +6.3% (July 2015/2014), Germany 6.1%; France 3.

3 TODAY: ITALY IS BACK GDP growth forecasts: +0.9% in 2015, +1.6% in 2016, after 5 years is back on line with Eurozone growth rate Employment: +325,000 ; +1,5% (August 2015/2014) Unemployment rate: 11,9% August 2015, the lowest since February 2013 Private consumption: +2.1% (July 2015/2014), best result since 2010 Export: +6.3% (July 2015/2014), Germany 6.1%; France 3.1% The Milan Stock Exchange is the fastest growing among G7 countries, over +12% since January 2015 (second is Paris +5% circa) Industrial new orders: +10.4% (July 2015/2014) Industrial turnover: +2.3% (July 2015/2014) Sales of new cars: +15.3% (vs. Germany and France +5.6%) Firms Confidence Index (August): 106.2, the highest in the last 5 years, it was 95.4 in February 2014 Consumer Confidence Index: 112.7, the highest in the last 5 years, it was 94.9 in February

4 A COMPREHENSIVE REFORM PLAN Political institutions Labour market Fiscal system Justice Banking and finance Education Anti-Corruption 3

5 1 REFORM OF POLITICAL INSTITUTIONS Electoral law: two round system including a run-off to allow a clear winner stable government. Reduction of local government: abolition of the Provincial level of government to increase simplicity Constitutional reform: - One-chambre Parliamentary system - Clearer distribution of powers between central and local governments 4

6 2 THE JOBS ACT A modern and flexible labour market Easier for firms to hire and fire Income protection for workers 5

7 2 FISCAL SYSTEM 2014 Reduction of income tax for low-to-middle earners 2015 Reduction of labor tax on firms tax 2016 Abolition of property tax for the family home 2017 Reduction on corporate tax 2018 Further reduction on income tax Reform and simplification of the tax code 6

judges Increased use of ICT in civil proceedings including

8 3 JUSTICE Measures to strengthen the fight against organized crime, illegal assets and false accounting Civil liability of judges Increased use of ICT in civil proceedings including mandatory electronic filing Plan to reduce the duration of civil trials 7

Reform of the bankruptcy regime to avoid lengthy processes Finance for

9 4 BANKING AND FINANCE Popolari banks (large co-operative banks) must turn into join stock companies Management of NPLs strongly improved Reform of the bankruptcy regime to avoid lengthy processes Finance for growth measures to increase the range of available financial sources for companies 8

New rules for the turnover of employees and compulsory mobility of public

10 5 PUBLIC ADMINISTRATION A strong simplification based on online services, a leaner and more efficient organization. New rules for the turnover of employees and compulsory mobility of public servants and meritbased careers of the PA managers Reform of the chambers of commerce and the cut of companies owned by a public body 9

merit-based reviews for teachers Better connection between education and the

11 6 EDUCATION A strong investment on education: 100 thousand more teachers Greater autonomy of individual schools: increased role for headmasters, merit-based reviews for teachers Better connection between education and the labour market Increased teaching time on foreign languages, art, music, physical education 10

12 7 ANTI-CORRUPTION A new, powerful, Anti-Corruption authority (ANAC) ANAC has an independent and authoritative leadership Pre-emptive action on procurement and public works 11

In 2016 public debt will start a descending path.

13 THE WAY AHEAD Solid public finance continue to improve: deficit was at 3.0% of GDP in 2014 and its projected to move to 0.9% surplus in In 2016 public debt will start a descending path. Multi-year tax reduction plan proceeds hand-in-hand with more reforms: liberalizations, privatizations, and reform implementation. Political stability and economic modernization are the defining features of the years ahead. 12

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15 1 ST FDI ATTRACTION ROADSHOW THE ITALIAN GOVERNMENT 14

Council of the European Union Brussels, 23 April 2018 (OR. en) Eugen Orlando Teodorovici, Minister of Public Finance, Ministry of Public Finance

Council of the European Union Brussels, 23 April 2018 (OR. en) 8257/18 ECOFIN 354 UEM 125 COVER NOTE From: date of receipt: 23 April 2018 To: Subject: Eugen Orlando Teodorovici, Minister of Public Finance,