Amongst all of them, Italy makes an interesting case because as a nation, it has been ranked among the top 25 most developed nations, has one of the best quality-of-life (features among the top ten in the quality-of-life index) and has a per capita GDP at par with other developed nations of the world. This fourth largest European economy is today struggling with a $2.2 trillion debt which is more than 120 per cent of its GDP. In spite of being one of the major manufacturing hubs of the region and boasting of big labels in the fashion and automobile industry, it has miserably failed to keep a balance between expenditure and income. UniCredit SpA (UCG) and Intesa Sanpaolo SpA (ISP) – two of Italy’s biggest banks – recently collapsed while five other large Italian banks have lost around 30 per cent of their share value since the beginning of 2011. Today, 20 per cent of their GDP is made up by the parallel economy and corruption ails the system. So much so that investors too are now shying away, which is evident from the fact that today Italy ranks lowest among OECD countries in the ‘Ease of Doing Business’ index; for that matter, Italy has seen a fall in all attributes since the last year’s ranking, with a drop of 10 points. The overpaid bureaucracy and corrupt political system have been instrumental in systematically destroying the nation, bit by bit!
The situation in Italy has been worsening with every passing day. More than 500,000 youths (aged less than 30 years) lost jobs between 2009 and 2010, in a nation that once had the lowest unemployment rate (around 8.5 per cent) in the entire Europe. Among this, the worst hit were pregnant women (around 800,000 pregnant women left the job as they were denied medical leaves) and low-cost skilled labourers. This not only led to a drop in family incomes, but also prevented hundreds of parents from sending their children to school. As a result, in the last year, the average school drop-out rate was around 20 per cent! And mind you, in Italy, the first six years of primary education are free.
Italy also fears that in the next few months to come, around one-fourth of the entire population may get trapped in the clutches of poverty. As per official figures released in July 2011, the poverty rate increased by 5 per cent and touched a figure of 29.9 per cent among households of 5 and more members. This is evident from the fact that in order to meet their daily consumption, the household savings rate in Italy has been experiencing a steep decline.
The savings rate that once oscillated between 25 to 34 per cent is now around 8-9 per cent! Needless to state that given the state of the socio-economic condition, societal crime too has increased in the nation. More and more unemployed youth attempted suicide in 2009 and 2011. On an average, 250 additional cases of suicides were reported in Italy every year starting 2009 – and 75 per cent of all cases were attributed to youth who were unemployed or lost their jobs. This is not all; kidnapping, assaults and sexual crime too saw a huge surge – around 25 per cent – since 2009. The cases of drugs abuse, teen pregnancy, drug addiction, alcohol abuse and depression have also seen an unprecedented rise in the last couple of years.
Add to this the problem of demographic replacement. According to a report published by the ISTAT (The Italian National Institute of Statistics) this January, the population growth is into a deep mess. Previously, due to migration, the population growth and the natural dynamic (the gap between birth and death rate) were positive. But then, after a huge protest against immigrants (due to the indigenous population losing jobs) the population growth started to decline. ISTAT reports that since the last four years, the natural dynamic is negative with the death rate surpassing the birth rate by 30,000 units; the average birth rate of women fell down to 1.40 by the end of last year. More and more parents are opting to not produce babies as they fear the high cost of medical and child-care. The government is also incapable of giving incentives for reproduction, as it did earlier, and had to discontinue their “fund for the newly born” scheme. Read More....
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