Italy’s Structural Reforms


Closing ‌Remarks by Angel Gurría, OECD Secretary-General at the  international conference on Structural Reforms

Rome, 24 September 2012

(As prepared for delivery)

Minister, Ministers, Ambassador, Ladies and Gentlemen:

It is a great pleasure for me to close today’s discussions with Minister Grilli. I am also very pleased that Ministers Fornero and Patroni Griffi have been able to join us, together with such distinguished panelists.

We have had a very productive day with frank exchanges of views on Italy’s challenges and on the policy options for addressing these challenges.

We all recognise the very positive and courageous steps that Italy has taken over the past few months. And we leave this room with the conviction that the wide-ranging reforms that the Italian government is implementing will bear fruit. We are aware of the challenges going forward but also of the immense capacity of you all to overcome them.

There is no alternative or shortcut going forward if we want a stronger, more competitive, but also more inclusive Italy. Continuing with structural reforms is the only way to break the vicious circle involving low growth, high unemployment, high public indebtedness and weak confidence. It is the only way to offer a brighter future for the new generations.

Reforms are not only about boosting productivity, competitiveness and growth. They are also about promoting social cohesion. The good news is that the new labour law goes in this direction. It is a key instrument to reduce the segmentation of the labour market, which traps so many workers, especially the younger ones, in precarious jobs and undermines their chances for a better future. Promoting inclusiveness is also about encouraging the participation of women in the labour market and improving the quality of education, challenges that Italy has yet to tackle head-on.

We share the view that most of these decisive steps will have to be followed by others. The reforms will need to be implemented in full and followed through diligently. And the momentum for complementary reforms has to be maintained.

I would like to highlight, if I may Mr. Minister, four points that have come out of today’s discussions:

First, we are confident that competitiveness will be enhanced by structural reforms leading to higher productivity growth. This conclusion gives rise to many considerations. While I do not wish to discuss it at length, this has been a clear conclusion from our work today.

Second, human capital and innovation are key components of productivity and need to be boosted for Italy to grow faster, to become more competitive and offer higher standards of living to all Italians. And here this is a combination of education, innovation and training.

Third, the recently approved labour law is an important step towards a labour market that works well and for all workers and we wish you success in implementing it. Fourth, Mr. Minister, public administration reforms have double benefits: they can help in putting public finances on a sounder track and also in reviving and modernising the economy. The promotion of integrity and transparency in the public sector is key to improving the business environment and even more importantly to restoring trust in government. Most of all, when a sacrifice or a special additional effort is called for, it is clearly very important to impress upon the public that the government is doing everything that is needed and is doing so with integrity and transparently.

A major step forward has been taken in all these areas of reform. Of course, implementing these reforms will require alternative measures and ensuring that administrative capacity is available at the regional and local level. This is not just a national issue. And we see this in all countries everywhere, Italy in no exception. However, the risk is that they will remain a dead letter used to justify backward steps. We have said this many times: it is inconceivable to think about rolling back reforms which have already been enacted into law; because we see today, with great concern, political parties saying “once things return to normal, we, the X party, will propose rescinding this particular initiative, legislation, code or regulation”. I want to say that this seems to us to be not only an unwelcome outcome but a dangerous one, too, in that even just talking about such a possibility makes economic and financial market actors very nervous, and we need to send signals about the future and we need to do so right away. This is very, very important.

As you know, as part of the Making Reform Happen project, the OECD produces studies that examine the political economy of change. We have acquired much experience not only in “what to do” but also in “how to do it” and “how to implement reforms”.

Ministers, Ladies and Gentlemen:

I want to congratulate you for these very fruitful discussions. The debates we had here today, the suggestions and reactions we heard will act as catalysts for the continuation of reforms in Italy.

I hope each one of you will walk out of this room today with the assurance that continuing ongoing reforms and policies will restore confidence, revive growth and open up new opportunities for the Italian people.

And let’s not forget: the reforms that Italy is putting in place are important not only for Italy’s own sake; they are also important – as we have said on other occasions – for the euro area and for Europe as a whole. A more dynamic, competitive, inclusive Italy will help to resolve the internal imbalances that are at the core of the euro area crisis. The reforms that will make Italy stronger will also make Europe more resilient.

This is the moment to drive towards creating a stronger, more resilient as well as fairer Italy.  You can count on our support.

Thank you.