A few days before the beginning of August vacations, the center-left government of Italy, lead by Matteo Renzi, announced reforms and investments to lunch the economic take off of the regions of the south after long years of stagnation.

Following the meeting of the PD party (democratic Party), held on the 7th of august, the Prime Minister presented a long-term plan for investments worth a total of 100 billion to be spent over the next 15 years. The main goal of the resolution is to boost infrastructure, create new opportunities for entrepreneurs and offer more opportunities for growth in the tourism industry.

The resolution comes after a very harsh letter published in the national newspaper La Repubblica, in which the internationally renowned Italian writer and journalist, Roberto Saviano, wrote: “Dear Premier, the south is dying: Everybody is leaving, even Mafia.”

The opinion piece that generated the reaction of the institutions was based upon a yearly report released by ISTAT (Italian National Institute for Statistics) that looks at the economic and social condition of each region along with aggregate data on the macro regions, such as north, center and south. The outcomes present a critical situation in Southern Italy compared with the rest of the country. The report lead in the past few weeks to manifestations of concern from all parties, calling for the government to react to the situation, which threatens to endanger the economy of the entire nation.

According to the report, in the past 15 years Southern Italy grew at half the speed of Greece, despite having a population of approximately 20 million people compared with Greece’s 16 million. Svimez summarized its analysis by declaring: “Southern Italy is at risk of industrial desertification, with the consequence that the lack of human, entrepreneurial and industrial resources might lead it to miss the opportunity for an economical and financial recovery. The cyclical crisis risks to become chronic underdevelopment.” 

The report shows that only 5.8 million people (of 20 million) are employed and that only one woman out of five has a job. The employment rate of women between 35 and 64 years of age in Italy is 64%; in the south it is 35%. In 2014, the number of families that went below the poverty threshold rose substantially. Last year, 390 thousands new families became “poor.” 37.5% are in Southern Italy (Sicily 41%, Campania 37,7%). The study showed that in the north one family out of 10 is at risk of falling under the poverty threshold. In the south the ratio is much higher, it is one out of three.

In accordance with the aforementioned situation, the government has investment plans, which are supposed to raise the GDP, creating new job opportunities and fostering the recovery and stabilization of the market. Minister of Economic Development Federica Guidi, defined this plan as a new “Marshall Plan” for the south.

The new resolution, which will be published by the government in the next few weeks, tries to address a series of problems that affected the south for decades and that constitute the so-called “Southern Question.” The chronic inability of the south to grow is due to a series of elements, such as the infiltration of criminal organizations within the economical and political texture of the society, the mismanagement of public assets, the strong lack of parameters and means of control of the state and of privates, the inability of the state to properly manage public resources and investments in an efficient and effective way, the structural stagnation of the market and the difficulties to properly connect the region of the south with the rest of the nation and eventually with Europe as well. Those are some of the elements that led to the straightening of organized crime (such as Mafia and Camorra), substantially contributing to slow down the economical and social development of the southern regions.

The aforementioned elements are some of the main causes that also led many people, both from the left and the right, to heavily criticize the government for the choice of investing even more resources in the regions in Southern Italy. Many politicians and journalists criticized the government for proposing reforms which do not tackle the problem at the source. Il Giornale, a national center-right newspaper, reports that from 2009 up until 2014, the state spent 45 billion, along with other 390 billion from 1951 to 2009. The outcomes of these investments, it says, produced 20% unemployment and 56% of youth unemployment. The national unemployment is 12.8 and the youth unemployment is 42,7%. Southern Italy is considerably below the national average. As the right-wing parties underline, Premier Renzi should revise his model of development.

The reply of the center-left government was the creation of a commission, supervised by Renzi itself, with the aim of efficiently managing the funds addressing investment without wasting important resources.

By the end of august, the government will publish a detailed dossier along with the first set of reforms.

Analysis by Cesare Baccheschi