The Wall Street Journal reports that as Italy begins to emerge from lockdown, it faces a steep uphill climb back to normal. The article is paywalled; here are excerpts:
The coronavirus pandemic has precipitated one of the worst economic downturns in generations across the world. But few major economies are likely to fall as far as Italy’s, or take longer to recover.Although Italy’s lockdown officially ended on May 18, many restrictions remain, and the economic impact will be long lasting. The new poor include small-business owners such as shopkeepers, restaurateurs and market vendors, as well a vast number of workers employed in sectors such as tourism and entertainment, which have little prospect of reviving any time soon.The health emergency has left hundreds of thousands of Italians unable to pay for their own food for the first time, the biggest jump in poverty since the aftermath of World War II.
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Italy is ill-prepared to deal with a crisis of this magnitude. The country never fully recovered from the 2008 global financial crisis and the eurozone debt crisis that soon followed in 2010-12. Those events left Italy a poorer country and the government much more indebted today than it was then.“In 2008, Italian families were in a much more solid situation,” says Cristiano Gori, professor of political sociology at Trento University. “This crisis is hitting Italy after 10 years of constant decline.”Since the financial crisis, the number of people living in absolute poverty has continued to increase, doubling to a record high five million in 2018, according to Italy’s statistics agency. That number is expected to rise much more rapidly now, with the Italian trade union UGL estimating it could soar above nine million people over the next few months.The Italian economy is expected to contract by 9.5% this year, according to the European Commission, more than any country in the European Union except for Greece.“We are witnessing a further erosion of the lower middle class,” says Pierluigi Dovis, a representative of the Catholic charity Caritas in northern Italy. “Only some of them will eventually be able to lift themselves up again. Many of them never will.”
Poor Italy. As much as I love that country and its people, this hurts. It’s the kind of thing I was thinking about earlier in the day, when I wrote that post about how this pandemic could change the world along the lines of World War I. Italy has been hit harder than any of the other major industrial countries, but if this crisis continues for a long time, eventually all of us may be in as much trouble. What happens when a country has gotten used to a certain level of wealth and security, and it all goes away, just like that, for millions of its people? [Psst: Nobody mention Weimar Germany!] We are about to see in Italy’s case — and maybe in our American case too.
One thing is for sure: Covid-19 is going to take care of the immigration crisis to Europe. No government will be able to remain in power if it allows more of the Third World poor to flood into their nation under these economic conditions.
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