Angry Italian Voters Get Short-Changed From a Messy Economy

Italy’s economy is growing again, but it’s still the worst performer in the euro region, souring voters’ spirits before the March 4 election.

With polls before the two-week blackout showing no overall winner, the parties are honing their pitches on the economy.

Former Prime Minister Silvio Berlusconi promises his tax-cutting plans will drive faster growth. The anti-establishment Five Star Movement guarantees a “citizen’s income” for the most disadvantaged.

The ruling Democratic Party points to the steady recovery from the country’s worst recession since World War II. Yet it’s hampered by unemployment stuck at almost 11 percent.

Few Italians closely follow the latest economic data from the national statistics agency Istat, but they know the recovery is much patchier than the government’s rhetoric suggests.

These seven charts show why.

There Is Growth, But It’s Slow

The economy has expanded for 14 straight quarters, though at the current pace it would need as much as six more years to get back to the level before the financial crisis. Meanwhile, the economy of the 19-nation euro area is enjoying its best growth in a decade.

Good Times for Goods Sent Abroad

“Made in Italy” still spells magic. That means exports and industrial output are up as the global economy improves.

More Jobs But More Uncertainty

Italy has created almost 1 million jobs since the Democratic Party overhauled labor laws in 2014, but 59 percent of them are for defined periods. In other words, the unlucky worker may be out on the street afterward.

There Are More Poor—a Lot of Them

Even in the euro area’s third-biggest economy, a collapse into poverty is always waiting outside the door for the most unfortunate. Italians at risk rose by more than 3 million to 18 million in the decade through 2016, the last year for which data are available.

Flat Tax Plan Gains Supporters

Italian personal income taxes, with a top rate including surcharges of 47.2 percent, are among the highest in Europe and well above the 39 percent average for the 28-member EU. It’s no wonder that the most discussed proposal in the election campaign is former Premier Silvio Berlusconi’s promise of a 23 percent flat tax for all.

Bad Loan Boost

More people and small businesses can’t pay back their loans. Regions with high default rates tended to vote Five Star Movement in 2013. That could spell trouble for the incumbents this time around.

Home Sweet Devalued Home

Italian home prices have been falling for more than six years in nominal terms and kept declining last year. A partial recovery in the number of sales is running out of steam.

While the economy has been growing for 14 consecutive quarters, that hasn’t convinced voters that the country has turned a corner toward lasting prosperity. Whoever inherits stewardship of the economy after March 4, is going to have their work cut out for them.