10 Jul 2012

IMF / ITALY

The IMF says that Italy’s outlook remains vulnerable and the country still faces key risks from the euro area crisis. IMF

Posted at: July 10, 2012 12:02 pm

Duration: 02:26

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STORY: IMF / ITALY
TRT: 2.26
SOURCE: IMF
RESTRICTIONS: NONE
LANGUAGE: ENGLISH / NATS

DATELINE: 10 JULY, 2012 WASHINGTON, DC / FILE

SHOTLIST:

RECENT - ROME, ITALY

1.	Wide shot, boat goes under bridge
2.	Close up, statues on bridge
3.	Wide shot square

10 JULY, 2012 WASHINGTON, DC

4.	SOUNDBITE: (English) Kenneth Kang, Mission Chief to Italy, IMF:
"Italy has embarked on a very decisive and ambitious agenda of reforms to revive growth. Italy needs to press ahead with reforms on many fronts, ranging from deregulating the energy sector to lower electricity prices, strengthen the labour market to encourage employment especially for the youth and improving the efficiency of the judicial system to improve the business environment."

RECENT - ROME, ITALY

5.	Wide shot, traffic with St. Peter's in the background
6.	Wide shot, bookstand

10 JULY, 2012 WASHINGTON, DC

7.	SOUNDBITE: (English) Kenneth Kang, Mission Chief to Italy, IMF:
"At the IMF, we do see light at the end of the tunnel. Based on our outlook, we see a recovery taking hold early next year led by a modest pickup in exports whose benefits should essentially spread and lift spending and investment in the economy."

RECENT - ROME, ITALY

8.	Wide shot, tourists on bridge
9.	Med shot, couple at ATM

10 JULY, 2012 WASHINGTON, DC

10.	SOUNDBITE: (English) Kenneth Kang, Mission Chief to Italy, IMF:
"Unemployment in Italy remains at unacceptably high levels. It's at 10 percent, the highest in the past 10 years, especially for youth with one in three workers seeking a job are without work. The key to solving the unemployment problem is to both make it easier for firms to hire workers, but also to encourage workers to join the labour force."

RECENT - ROME, ITALY 
11.	Wide shot, clothing stand in street
12.	Close up, clothes for sale

10 JULY, 2012 WASHINGTON, DC

13.	SOUNDBITE: (English) Kenneth Kang, Mission Chief to Italy, IMF:
"No doubt pension reform is painful for some, but it's essential to ensure the viability of the pension system for all generations. On taxes, Italy does have very high tax rates, but given the need to bring down the public debt, in order to cut taxes, you have to cut spending elsewhere. For this reason, we put a high priority on the ongoing spending reviews to identify the needed cuts in government spending. The savings could then be used to cut taxes in particular on labour, which would help encourage employment by firms."

RECENT - ROME, ITALY

14.	Wide shot, bridge
15.	Wide shot, city skyline

STORYLINE:

The IMF says that Italy's outlook remains vulnerable and the country still faces key risks from the euro area crisis.

Although Italy has implemented many reforms necessary to revive growth, progress in creating a more integrated euro area will be crucial for securing stability, according to a report released today.

"Italy has embarked on a very decisive and ambitious agenda of reforms to revive growth. Italy needs to press ahead with reforms on many fronts, deregulating the energy sector to lower electricity prices, strengthen the labour market to encourage employment especially for the youth and improving the efficiency of the judicial system to improve the business environment," said Kenneth Kang, Mission Chief to Italy, IMF.

The report was released as part of the IMF's annual economic check-up of Italy's economy.

Kang says the Italian economy will continue to contract this year, owing to tight financial conditions, necessary fiscal consolidation, and the global slowdown. On this basis, growth is expected to decline by about 2 percent in 2012 and a mild recovery to begin sometime in early 2013. This will be led by a modest pickup in exports, which would spill over and gradually lift household spending and business investment.

"At the IMF, we do see light at the end of the tunnel. Based on our outlook, we see a recovery taking hold early next year led by a modest pickup in exports whose benefits should essentially spread and lift spending and investment in the economy," Kang said.

Kang said that unemployment remains unacceptably high, with one out of three youths facing unemployment.

"Unemployment in Italy remains at unacceptably high levels. It's at 10%, the highest in the past 10 years, especially for youth with one in three workers seeking a job are without work. The key to solving the unemployment problem is to make it easier for firms to hire workers, but also to encourage workers to join the labour force," Kang said.

Kang says that taxes are far higher in Italy than in other advanced economies. The IMF places a high priority on the ongoing review to cut inefficient expenditure and generate savings that will allow taxes to be lowered—let's not forget that taxes are far higher in Italy than in other OECD countries.

"No doubt pension reform is painful for some, but it's essential to ensure the viability of the pension system for all generations. On taxes, Italy does have very high tax rates, but given the need to bring down the public debt, in order to cut taxes, you have to cut spending elsewhere. For this reason, we put a high priority on the ongoing spending reviews to identify the needed cuts in government spending. The savings could then be used to cut taxes in particular on labour, which would help encourage employment by firms," Kang said.

Filed under IMF ITALY .