In recent years Italy achieved a modest recovery, supported by global economic conditions, expansionary monetary policy and structural reforms. However, the recovery has recently weakened and Italy continues to suffer from long-standing social and economic problems. Living standards are roughly the same as in 2000 and poverty rates for young people remain high. Large regional disparities have widened over recent decades. A comprehensive reform package, raising productivity and employment growth, holds the key to stronger growth and social inclusion. In-work benefits and a moderate guaranteed income scheme would boost employment and reduce poverty, if supported by improved job-search and training programmes. Rationalising and improving coordination among bodies involved in regional development policies and strengthening capacity at the level of local administrations would help to boost growth and social inclusion in lagging regions.

SPECIAL FEATURE: TACKLING ITALY’S SOCIAL AND REGIONAL DIVIDE