Although Prime Minister Silvio Berlusconi survived two confidence votes, Italy’s exchange traded fund (ETF) isn’t in the clear. While the government won’t collapse, Italy’s political agony isn’t going away, either.
Berlusconi faced a no confidence motion in the lower house by a group of rebel center-right deputies, according to Money News. Despite his victory, Italy still has big problems: high youth unemployment, an uncompetitive industry, aging infrastructure and low funding on public services.
On the bright side, Italy has some of the highest levels of savers in Europe, banks are doing fine and most of its high public debt is from Italian loaners.
Sylvia Poggioli for NPR remarks that the largest problems facing Italy are political stagnation, a slow growth economy, a strong euro and a high number of unemployed young people ages 15 to 34. For years now, Italy has been losing its traditional export market and GNP is steadily diminishing. [PIIGS ETFs Not Out of the Woods Yet.]
For more information on Italy, visit our Italy category.
Italy clearly needs to deal with its issues before they become so large that economic growth turns negative. In the third quarter, Italy’s economy grew a scant 0.3% – and that’s a slowdown from 0.5% in the second quarter.
- iShares MSCI Italy (NYSEArca: EWI)
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.