I am very much aware of the challenges facing Italy today – including, until very recently, the flow of migrants – all the more so because of our shared culture and history, and, today, our shared institutions and challenges. As a central banker, however, I am going to focus on the economic issues, and notably on our shared currency and the euro area. ** To start with, let me just remind you of some stylised facts about Italy, which are often too quickly forgotten. Italy has many strengths: it is the euro area’s second largest manufacturing economy, after Germany and ahead of France. Its export performances have improved in recent years, thanks notably to an increased specialisation in high-end products1 and to the talent of its imprenditori, from Brescia to Bologna. Moreover, thanks to the reforms undertaken by successive Italian governments since 2012, its macroeconomic position is on the whole solid [slide]. To highlight just a few key figures: its net external position is almost balanced (-5% of GDP in 2017), and better than France’s; its current account has been in surplus since 2013 (2.8% of GDP in 2017); and its private sector debt is lower than the euro area average. Yes, Italy – just like Europe – has much more to be proud of than people say. Pride means that we can be more serene, without being aggressive. But it should not prevent us from being lucid. Italy is indeed expanding at a slower pace than it should be [slide].
Otherwise, persistently high public debt/GDP ratios will leave us chronically vulnerable to the possibility of adverse macrofinancial shocks arising in the future. This programme should include a clear definition of the budgetary objectives and their timeframe, along with details of the measures needed to attain them. It should also be based on a prudent forecast of macroeconomic developments. Further, it should include an appropriate response to possible slippage, and be compatible with an improvement in the quality of public finances. In this respect, it will be a priority on the expenditure side to subject the various items to exhaustive review, with the aim of identifying the areas in which there is room to improve efficiency. It is important that the recommendations further to AIReF’s assessments be taken into account as soon as possible. We also need a comprehensive review of the tax system, in order to improve its revenueraising capacity and its efficiency. Comparison with the other European countries can guide us here. And, once again, the results of AIReF’s recently published review of tax benefits are a significant contribution in this connection. 11  Conclusions In sum, following an unprecedented recession, we face a gradual recovery in the economy, which is still incomplete and uneven, and subject to high uncertainty. Against this background, the ECB’s actions since the onset of this crisis and the recent approval of the European recovery plan are also an unprecedented common European response.