It's Payoff Time

But high taxes and rigid labor laws threaten the nascent recovery

A funny thing happened this summer to Franco Tato, chief executive of Italy's giant electric utility Enel. In May, Tato noticed an upward spike in electricity demand, a mirror of economic activity and one that had been depressed in Italy for more than two years. At first, Tato suspected a statistical fluke. But each month since then, demand has been up sharply. The Enel head now predicts that by the end of this year, Italy will be consuming over 4% more electrical power than it did in 1996--the largest jump in years. "The recovery is here, and it's a lasting one," says Tato.

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