An interesting little point here:
It is two weeks since the Office for National Statistics published a record-breaking estimate of a 20.4 per cent fall in gross domestic product in the second quarter. At a stroke, the quarterly level of GDP was reduced to its lowest level since mid-2003. If it stayed there, 17 years of economic growth would have been wiped out.
As we should all know by now ONS actually tried to measure this properly, including the loss of government production in education and health care. Unlike everywhere else which just blithely assumed the usual, that cost equals output.
And Italy?
Italy’s GDP dropped by 12.4pc between April and June, the second quarter of the year.
The health emergency has wiped out about 30 years of growth.
“It has taken the country back to levels of GDP of the early 1990s,” says Federico Santi, a Europe analyst with Eurasia Group.
A little over half the GDP fall has taken the country an entire decade further back into historic poverty.
That’s what the euro has done to the growth rate since the fixing of the exchange rates in those 1990s. Aren’t we all glad we never joined the currency and also that we’ve left such a disaster?
Ah, GDP. Not per capita. And what, ahem, has happened to the relative size of the (working) population in the two countries in the mean time?
Also there is the fact that Italy grew poorly for some considerable time pre-euro, and has underperformed compared to many (most, possibly all) other euro countries since. Which facts might lead one to conclude that, whatever the effect of being in the euro, there are also some rather important non-euro structural factors at play in Italy’s relatively poor economic performance.
All good points BUT Italy’s population hasn’t shrunk significantly – in fact it has grown modestly – and this means that GDP has grown at around 0.44% pa for the last 30 years so less than half the rate in the UK.
Tourism is much more significant to Italy than the UK and that is strongly correlated with wealth in the countries of origin of the tourists so the increase in worldwide wealth should have benefited the Italian economy relative to the UK’s.
The study, “cepStudy 20 Years of the Euro: Winners and Losers 2019” (can be found on the CEP web site) argues convincingly that Germany and to a lesser extent the Netherlands have benefited from the euro, whereas all other eurozone states have significantly been negatively effected. The study calculates that in 2017 the per capita GDP cost of Italy’s euro membership was -8,756 euros and that from 1999-2017 the per capita GDP cost was 73,605 euros. The figures calculated are the worst for any eurozone member. The total cost of Italy’s eurozone membership 1999-2017 is calculated in the study at… Read more »
It may well be that joining the Eurozone (and offshoring its monetary policy!) helped impoverish Italy during the 1990s. However, using this fact when measuring something else, and then trotting out a statistic of number of years of growth reversed, is the use of numbers to exaggerate. Anyone who didn’t want to exaggerate would not express the Covid economic contraction in these terms.
Are the Mafia’s operations included in Italy’s GDP, plus all the uninvoiced work that gets done?
I might as well point out that the Germans feel that the Italians should be nice to illegal immigrants and not send them home. But of course they also shouldn’t send them on to Germany.
Needless to say, I believe that, while the navies of Europe aren’t what they were, they’re still capable of dealing with unarmed people in rubber dinghies or ‘humanitarian rescue’ boats. I’d thus simply tow them back to Africa or Asia, and provide NATO help for the Greeks, Bulgarians and Turks to reinforce their borders.