Workplace Italy's new underclass -
10 million "poor" citizens

Bad news always comes in three.

This week has not been the best week for the Italian economy. A series of bad news - that has been more or less ignored by the government - painted a grim picture of the Italian economy.

Firstly a report by the World Economic Forum revealed that Italy has
sunk to the 47th place in the list of the world's most competitive
countries. This is a fall of six places in a single year and 26 places
since 2001.

Better than Italy China (46), Botswana (45) and all the other EU, a part from Poland, which ranks 60th. Even Estonia (20), France 27th, Spain (23), Portugal (24), Belgium (25) and Luxembourg (26) are more competitive than Italy.

According to the report, the unnecessary and complicated
bureaucracy, the unsuitability of infrastructures, excessive taxation
and a strict labour policy as Italy's main barriers to competitiveness.
Other problems include criminality, corruption, inflation and political
changeability.

Secondly for the first time in Italian history, the Bank of Italy
Governor, Antonio Fazio, has criticised the 2005 draft budget as
useless, and he officially urged Prime Minister Silvio Berlusconi to
revise it. 'The public accounts situation that has emerged at mid-year
is grave,' Fazio said during a parliamentary session on the budget.

'The necessary measures to spur the economy on include greater funding on a long-term basis, than foreseen in the last budget.' The national association of entrepreneurs, Confindustria, agreed with the Bank of Italy. Italy already holds the world's third-largest debt. Our budget deficit keeps climbing and rose 3.5 percent during the first six months of 2004.

Thirdly Italy's statistics office, ISTAT, reported that 18.5% of Italian
families risk poverty - nearly one family out of five, or more than 10
million Italians.

Wages in Italy are stuck at 1990 levels and more than 6 million Italians earn between 600 - 1000 euros/month (or £400-£650) for a 40 hour week.

But in 2004 an income of 1,000 Euros allows only a very basic lifestyle in Italy - particularly for people with children.

10.6% or more than 2 million of Italian families (nearly 7 million
people) live under the Italian poverty line of 860 euros a month, which is as much as family has to spend in food and bills to survive every month. Then there are another 4 million families (7.9 % of families) that survive on less than 1000 euros a month, and that are at real risk of poverty.

But what is the Italian center-right government doing to solve all
this?

The Budget Law 2005 is based on cuts and does not include a single
strong measure that will push the Italian economy ahead. Most of the
government ministries ignore the figures and say that everything is all
right. Berlusconi is promising to cut taxes to improve the standard of
living - but only after the next general election. However the
opposition parties maintain that the tax cut will benefit mostly those
who earn more than 50,000 euro/year.

Felix Petrelli c2004