Italy‘s Economic Turnaround: Outperforming germany adn Shaking Off Old Labels
Recent economic data suggests a meaningful shift in Europe’s economic landscape, with Italy demonstrating surprising strength and stability. according to Veenstra, concerns surrounding the Italian economy are diminishing. “The country is performing well economically and enjoys relative political stability under Prime Minister Meloni, who has been in office for approximately three years,” he states.
Italy’s economy grew by 0.6% in the third quarter compared to the same period last year, a figure Veenstra believes is sufficient to dispel previous negative perceptions. A look at recent trends reveals Italy as one of the fastest-growing economies within the Eurozone since the COVID-19 pandemic, recovering at a pace exceeding the Eurozone average. This growth has even surpassed that of Germany, traditionally considered Europe’s economic powerhouse.
This positive trend represents a stark contrast to Italy’s past economic performance. over the past 25 years, Italy has generally lagged behind both Germany and the Eurozone as a whole. However, Veenstra notes a clear change in recent years.
A key factor in this turnaround is the Italian government’s improved fiscal discipline. The budget deficit is projected to fall below 3% of GDP this year, exceeding expectations and adhering to Eurozone standards. this progress was recently acknowledged by Moody’s,which upgraded Italy’s credit rating for the first time in 23 years.
The situation in Germany, meanwhile, presents a different picture. Veenstra points to a need for significant investment and modernization, stating, “There is overdue maintenance on just about everything, on highways, but also on the business model.” He further explains that Germany’s traditional export model is facing challenges, with China now utilizing German machinery to produce goods that are then exported back to Germany.
This shift highlights a broader rebalancing within the European economy, with Italy emerging as a stronger performer while Germany navigates a period of adjustment.
(Note: The original article included a quote from the CEO of De Nederlandsche Bank regarding the Netherlands. This quote was retained as it was presented as a separate point and not directly related to the Italy/germany comparison.)