“We come from ten years of no productivity growth and there are many actions we can take to boost productivity,” even in this difficult situation, said Paganetto, one of the expert that drafted the Kok report, published by the Commission in 2004.
According to the Italian economist, the country can bridge the productivity gap it has with other European countries and the United States, by opening the services market “at no cost.”
“The competitive stimulus in the services sector, which accounts for about 70% of GDP, can be decisive for growing the economy, especially if accompanied by innovation and new technologies,” he added.
European structural funds can drive regional development in Southern Italy, the so-called Mezzogiorno, and projects in the south can turn into opportunity for growth for the whole country.
The expert advocates for a national authority which would coordinate important energy and digital infrastructure projects financed by the European Union.
“We must also focus on human capital, the richness of this country, in particular, young people, who today represent an unacceptable proportion of total unemployment,” he said, adding that young people are the engine of growth in all dynamic countries.
A great project for young people should be a first choice, added the economist.
Solidarity wealth tax
“We need to think of a tax on wealth, even if temporary, to be used in part to reduce the fiscal wedge between labor costs and wages,” he added, stressing that more growth is essential.
Such a move would restore confidence in the future for families and businesses. “Only in this way debt will cease to be a nightmare we cannot get rid of,” he insisted.
Paganetti insisted that the Italian government should make sure it gives a clear message to the markets. Measures should be structured in such a way that it would give a clear trajectory of debt reduction over the years.
To establish trust and credibility on adopted measures, the Italian economist argues for unity of all political forces without distinction, almost hinting at a national coalition government.
“There is no time to lose: the country has great resources and all, including Europe, are interested in the revival of Italy. The fact that Italy is in trouble does not help anyone. We must act not only because the EU called for it, but because there is a real need for our country. And we are able to do so.”