Italy has experienced a marked slowdown in productivity growth since the mid- 1990s. While it is not entirely clear what caused this slowdown, it is likely that insufficient product market competition played a key role. Hence, the two recent waves of liberalisation are welcome. These reforms are not only likely to reduce entry barriers and rents in a number of services sectors, but could also positively impact on other industries. Yet there is still scope to strengthen market forces. For instance, implementing new competition bodies at local levels, driven primarily to protect consumers’ interest, could be a key factor to stimulate the retail and wholesale trade sector and improve transparency in local public utilities. As well, Italy needs more competition in the financial sector so as to spur innovation and productivity; in this respect, recent reforms in the banking industry appear promising.