Italy’s dynamic young prime minister hit the ground running when he came to power last year, promising to shake up government, business and society. But his reforms may be losing steam as voters, especially on the left, start to desert him.
Handelsblatt Global, June 26, 2015
In Italy, he is known as “The Scrapper,” or “Il Rottamatore.”
Matteo Renzi has sworn to shake up Italy’s stagnant economy and sclerotic political system and drag the country out of what he calls “the swamp.”
Italy’s dynamic young prime minister, who came to power in February 2014, has been determined to challenge the country’s vested interests.
After coming to power via a coup in his center-left Democratic Party, he pledged to push through an ambitious list of reforms, tackling everything from education and justice, to the electoral system and the labor market.
He was nothing if not confident. “My ambition,” he said last year, “is not to do better than Greece but to do better than Germany.”
Yet, after a strong start, the 40-year-old former mayor of Florence has run into difficulties, with rising unrest from the left of his party and trade unions, and waning popularity among voters, as evidenced in the disappointing performance in local and regional elections.
For many observers, it is crucial that Mr. Renzi succeed in Italy, the third-largest economy in the euro zone.
Beset by a decade of stagnation and exiting three years of recession, its government debt is the second highest in the euro zone after Greece, at almost 135 percent of GDP, unemployment is just below 13 percent and youth unemployment is over 40 percent.
A combination of external forces and his initial reforms, however, seem to be giving the economy a small but significant boost.
Growth in the first quarter was 0.3 percent and the IMF forecasts growth of 0.7 percent this year and 1.2 percent in 2016. While far from spectacular, it’s welcome news for an economy mired in stagnation for years.
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