Italy’s economy has passed the deep recession triggered by the global crisis and seems set for a gradual recovery. The strength of this recovery is uncertain: it would be wise to plan for no more than the rather sluggish growth seen in the decade prior to the crisis. Hence, the priority remains structural reforms to increase growth potential, while maintaining a stable fiscal framework oriented towards consolidation, as appropriately pursued during the crisis. Such a policy can sustain confidence in Italian public finances in the face of the large stock of government debt, in turn helping to support the financial system whose health is crucial for the recovery.