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Italy's economic crisis deepens

11-12-2013 11:06 BJT

By CCTV correspondent Jack Barton

High taxes and low literacy scores are just two of Italy's entrenched obstacles to growth. They highlight the struggle some Euro zone countries have had with being tied to an inflexible currency they cannot devalue in times of crisis.

Recession in the Eurozone's third largest economy is expected to deepen in the months ahead amid concern the country could derail the block's fragile recovery.

Pietro Como worked at this employment centre in Rome helping others find work that is until he was retrenched after Italy's economic crisis began to accelerate, pushing the jobless rate towards its current record high.

"I am frustrated. I am 47 years old and practically from when I was 43 I see myself going backwards by the political and economic situation," Pietro, who lives in the world's largest apartment block, said.

It's over a kilometer long, allegedly plagued by corruption and mismanagement and many Italians believe in a handy metaphor for the county's current problems.

The building that everyone calls "the big snake" is home to 5000 people. There is no shortage of grand ideas on how to fix this place up. The problem is with Italy stuck in its longest recession since the Second World War, there's no money.

Italy's big problem is that it spends most of its state revenues paying off two trillion Euros of public debt at a time when consumer spending is low and county's exports have no competitive edge.

Rigid labor laws and high taxes are also pushing Italy in a financial gladiatorial arena leaving the country without an economic leg to stand on.

"To maintain taxes so high in Italy is to create a grave for the economy. It means that the economy will collapse. Everybody knows this. We will not have any recovery from the crisis," Raffaele Bonanni, Secretary General of Italian Confederation of Workers' Union, said.

Italy's finance ministry forecasts the economy will continue shrinking by 1.8 percent this year.

"Italy is the country that has made the less effort to correct this competitive problem," Philippe Ledent, ING economist, said.

"The made in Italy is still working. They are not so competitive for the moment but they have something to export and this is probably a big different to Portugal or Greece for example," Philippe said.

So all eyes are on Rome to see if the government can halt the recession and revive growth.

Editor:James |Source: CCTV.com

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