On June 8th, 2021, the Horasis community gathered for the annual Global Meeting to navigate latest developments and discuss the post-COVID future. Under the theme “Fostering Shared Humanity”, over 1000 speakers and delegates debated how to be entrepreneurial and at the same time proactive in advancing sustainable development in the interest of the global public good.
What are the seedpods of shared solutions to solve the existential challenges facing business, governments and humanity at large? How to nurture the deep transformations our world needs? And how to ignite discourses on openness, fair globalization and equality?
I was delighted to curate and moderate an incredible panel and to discuss with leading professionals from the government and the private sector how a strong and resilient recovery in post-pandemic Italy is possible and is happening.
A little background first: Italy is the eurozone’s third-largest economy, and was the first European country to be hit by the pandemic in early 2020.
A recent New York Times article titled “How Mario Draghi Is making Italy a power player in Europe”, detailing how the Prime Minister is leveraging his European relationships and his solid reputation to make Italy a stronger force on the continent.
When in late March the EU was stumbling through a Covid-19 vaccine rollout coupled with shortages and logistical challenges, Draghi took matters into his own hands by seizing a shipment of vaccines destined for Australia – and showing that a new, aggressive and strong force had arrived in the European bloc. The Australia experiment, as officials in Europe call it, was a turning point, for Europe and for Italy. With Chancellor Merkel of Germany leaving office in September and President Macron of France facing very tough elections next year, Draghi seems to be poised to fill a leadership vacuum in Europe, showing that Italy is now punching above its weight.
On April 28th, the Italian parliament approved the ‘Italian National Reform and Resilience Plan”, which foresees reforms and investments to be implemented in the span of the next five years. With a total value of €235 billion, the Italian Recovery Plan represents the largest Recovery and Resilience Plan, as well as the one on which all eyes will be on.
In a short interview during the same month, Mario Draghi confirmed that Italy's 160% debt ratio, second highest in the euro zone but far from Japan’s debt at 200%, is not worrying because low interest rates, central bank support and the COVID-19 pandemic have changed the way markets view debt sustainability.
“Today’s eyes – he stated - see things completely differently, the pandemic has made it legitimate to create more debt, it has prompted the ECB’s strategy and driven the behaviour of those who make the rules in Brussels, however we must make a distinction between “good debt and bad debt”, what matters is that countries use debt for productive investment in order to create growth”.
Although since 1992 the Italian governments have had budget surpluses year after year, over the last 20 years, Italy has experienced a period of economic stagnation.
Most economists agree in identifying the cause of such stagnation in the decline of productivity, which in turn is largely driven by a series of structural deficiencies afflicting both the private and public sector.
To support the country’s recovery, in line with the EU guidelines, the investments and reforms foreseen by the Italian Recovery Plan are articulated into six major missions:
1. Digitalization, innovation, competitiveness and culture
2. Green revolution and ecological transition;
3. Infrastructure for sustainable mobility;
4. Education and research;
5. Cohesion and inclusion;
6. Health.
About 40 per cent of the Recovery Plan will be spent on green projects, and 27 per cent will be dedicated to the digitalisation of the Italian economy. The plan is heavy on investments to modernize, boost innovation and digitize Italy’s economy and bureaucracy and encourage environmentally sustainable development.
Bank of Italy indications of last week show production regaining strong momentum, fresh investments, and an accelerating economy, with a 4% GDP growth shown so far in 2021, up to 4.5% according to the OECD. Due to the pandemic, Italian companies and families have saved over 140 billion euros, or 9% of GDP. Something similar has also happened elsewhere in Europe.
On June 1st, during a public event, prime Minister Draghi said “Italy is alive, strong, and has a great desire to restart. The months of the pandemic were very tough but we are now facing a phase of recovery and trust, on which to build a fairer and more modern country. And to release the energies that have stood still in recent years.”
So, will a recovery gradually take shape and become as impetuous as data indicators seem to show? Can technology promote a new model beyond GDP to measure a modern country’s wealth and sustainability while guaranteeing sustainable development? Join our discussion and find out more, full session in the video below.
M.
(info@smartbizhub.com)