Introduction

Abstract

The problem of Italy’s low GDP growth is not due to the country’s lack of international competitiveness and its inability to compete on global markets, as much as it is a question of weak domestic demand, sapped by twenty years of growing taxation and austerity aimed at reducing Italy’s public debt. Indeed, there is extensive recent statistical evidence affirming the high external competitiveness of Italy’s industrial manufacturing system: (a) Italy’s manufacturing sector is second in Europe and sixth in the world in terms of generated value added; (b) from 1999 to 2013 Italy’s share of worldwide exports of manufactured products decreased less than that of other developed countries like the United States, Japan, France and the United Kingdom; (c) in 2012 Italy joined the elite group of economies that boasts a foreign trade surplus of over 100 billion dollars in manufactured goods; (d) in 2013 Italy’s trade balance for manufactured goods closed with a surplus of over 98 billion euros, the highest level ever achieved; (e) from 2010 to 2013 Italy improved its total trade balance by 60.5 billion euros, moving from a deficit of 30.1 billion euros to a surplus of 30.4 billion euros; and (f) Italy’s 2013 trade surplus of 30.4 billion euros is the fourth largest in the EU or second only to Germany if one excludes the “anomalous” cases of The Netherlands and Ireland (the first being purely a transit country for non-EU goods going to neighboring countries, and the second country a fiscal hub).