Category: Italy

I am originally from Venice, I am currently living in Hong Kong and I have been pondering the same question for quite some time.

Obviously, your mileage may vary, but these are the reasons that would push me to live in Milan:

A. Excellent public transports: by all means, Milan has modern transport services “by modern standards”, not by the (admittedlypoor) Italian standards. After years of neglect, Milan is now equipped with an excellent metro system (still expanding),the administration is openly trying to curb the traffic congestion in the city center and is pushing people to use bicycles. Continue reading “If you could live in any Italian city, where would you live in?”

Italy is a fantastic country to live in, as long as you do not need a job or to carry a business.

A. Bureaucracy & taxes

The Italian State genuinely hates entrepreneurs: it is basically impossible to do business in Italy. Those doing a business in Italy should be considered modern heroes, in my opinion. There is a constellation of bureaucratic hurdles, inefficient public officers, notaries, accountants, lawyers, whatever, that you are forced by the law to consult (and pay hefty fees to) even BEFORE you start a business. After you start it, there will be a multitude of completely irrational tax deadlines with draconian penalties (that change every year), bureaucratic checks, useless controls, etc. that actively make your business frankly impossible. Bureaucrats will do anything in order to take no responsibilities, live in medieval times, detached from reality, and they hate businessmen & risk-takers. This impacts all Italians as beaurcrats infiltrate more and more areas of the daily life and are largely unaccountable for their inefficiency, nepotism and, oftentimes, corruption. Continue reading “Why do some Italians complain about living in Italy? I.e. What makes life hard to live in Italy? I’ve heard many say that if they were young they’d leave the country.”

Far from it.

The Reign of Italy was born only in 1861.

Before that, for centuries, the Italian peninsula was divided as follows:

A. In the north: a constellation of Duchies (Milan, Mantua, Ferrara, etc.), Reigns (the Savoy), Republics (the Serenissima), Municipalities (hundreds) with completely autonomous jurisdictions, languages, traditions, and oftentimes fighting against each other extremely bloody wars lasting for decades at a time.

B. In the center: the Vatican.

C. In the South: the Kingdom of the two Sicilies.

Once the Savoy unified the Italian peninsula under their helm, one of the Founding Fathers, Massimo D’Azeglio, has been quoted saying: “Now that we made Italy, we need to make the Italians”.

To build a true Italian national identity proved particularly difficult: Venetians had the Serenissima Republic since the Huns invaded the Peninsula one thousand years earlier. In the South there were non-sporadic invasions by the Spanish, Normans and even Arabs, influencing culture, language and also food and it was still vivid even the old Greek culture heritage.

In order to find an example of a truly unified Italian cultural identity, we need in fact to go back to the Roman Empire.

Mussolini swiftly picked up on this idea at the beginning of the XX century with the whole Fascism cultural package and, unfortunately, we all know by now that it was not the most smart or fortunate attempt to re-establish a national identity.

After the disastrous WWII, Italy slowly tried to rebuild its national identity and in my opinion this is still an ongoing exercise which is far from having reached completion.

I love Capri and these are the unmissable things to do once there:

1. Visit the Villa Jovis and Tiberius’s Jump (free)
2. Go to Lido delle Sirene (free option available)
3. Stay at La Fontelina next to the Faraglioni (entrance fee)
4. Take a boat and visit the Blue Grotto
5. Take a boat tour around the island
6. Visit Anacapri (free) and Lido del Faro (free option available)
7. Dancing at Anema e Core (entrance fee)
8. Have a drink at the legendary Piazzetta
9. Visit the Giardini Augusto (small entrance fee)

TL;DR

A.The political class has been used to gain consensus through huge, erratic and irrational public spending and by giving out privileges to certain classes of citizens at the expense of the whole nation.
B.As a consequence, in the last 30 years the national debt ballooned (currently well above 120% of GDP and still growing) but still the older generations (at all levels and social classes) have a strong sentiment of entitlement and do not want to give up their absurd privileges: the Italians mentality remains strongly bureaucratic and prone to corruption, tax avoidance, shortcuts & privileges. At the same time, Italians only advocate for competition, free markets and innovation as long as their privileges are not touched.
C.The younger generations are the least protected/most damaged and are thus flying out of the Country in droves (0.5m people last year alone) looking for jobs abroad, and causing a huge brain drain at home.

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The long answer

1. The Early Years: from the Economic Miracle to the Terrorism

Italy has fallen so low for a series of reasons dating back to the 60s, 70s and 80s.
After WWII Italy was a country in ruin.
Unexpectedly it was able to achieve a great comeback in the 50s and 60s (the so called “miracolo economico“).
In the late 60s the “civil rights” revolution started and in the 70s the decade of red/black terrorism opened, basically dead-locking the Country for a decade (politicians, judges & journalists were kidnapped, shot and often killed, bombs exploded killing hundreds of civilians in order to cause a permanent status of terror, Sicilian-Neapolitan-Calabrian Mafia-style organisations started to infiltrate the political apparatus at all levels).

2. The “Pax Italica“: buying peace through public spending

The political class was unable to deal with the changing times and totally lacked a modern vision to guide its people forward (especially in the south, where economy was/is impressively lagging behind) in any way other than “buying” consensus like:

a.widespread generous pension-welfare concessions especially for public sector employees (for many years, they could go to pension with just14 years of work, so called “baby pensioners”);

b.thousands of jobs were created in the public sector every year out of thin air for no purpose other than just to “manufacture” consensus across the country, particularly close to the Municipal/Parliamentary elections (e.g. (i)18 thousands “cleaners” were hired by the School System in just 1 year, allegedly “by mistake” – (ii)to date, the Municipality of Naples still has approximately 20k employees, many of them are not even required to show up for work and go working at a second “undeclared” job elsewhere);

c.gigantic expenses for improbable and never-ending infrastructures – e.g. the Salerno-Reggio Calabria highway: to date, still unfinished after more than 40 years of uninterrupted works.

d. tax evasion of entrepreneurs, professionals, small business owners was tolerated (and oftentimes promoted) for decades.

e. corruption among the public officers was/is widespread, blandly punished and socially accepted as a way to obtain public procurement contracts, shortcuts from bureaucracy and achieve privileges at the expense of the rest of us (60bn € of cost for the community in 2013 alone).

f.thousands of companies (so called: “enti inutili” – “useless entities”) were created by the State/Region/Municipalities with no employees whatsoever, but with a board of directors appointed for the sole purpose of giving a well-paid office job to friends & families of politicians.

It was commonly accepted by the political class that in order for the economy to keep going they had to get into more debt and everybody would be happy.

3. Who pays? In the 80s the national debt started increasing 20% yoy

The situation started to become critical from the beginning of the 80s when the national debt kept increasing 20% yoy. The country was obviously poised for a disaster and the whole political system dominated by the Democrazia Cristiana, the Socialists and the Communist Party (with the exception of a few lonely politicians regarded as “crazy” at the time) turned the blind eye and kept foraging this kind of expenses to obtain the consensus of a large slice of the population (especially in the South of Italy where unemployment, mafia, organized crime, lack of entrepreneurs & infrastructures made the situation particularly difficult for the vast majority of honest people living there).

In the 80s Italy was a perpetual lavish party: politicians at all levels (from secretaries to MP and Ministries) were all having the best time of their life. Italy was now the 7th world power: a complete house of cards made only of public debt.

Basically all Italians were supporting this system where everybody was stealing something at the expense of someone else (or the future generations).

Corruption of public officers was rampant and unashamed: even low level politicians or Municipal councillors were unashamed of their exorbitant Hollywood-style life.

4. The wiping out of the old political class: Berlusconi enters the scene

The situation collapsed in 1992 when Italy was on the brink of bankruptcy and the Government was forced to devalue the Italian lira by 15% in one night just to pay the salaries in the public sector.

At that (dramatic) stage the political class instead of waking up, tell the truth to the taxpayers and do something, decided to bury its “collective” head under the sand, until a widespread investigation by the Magistrates of Milan exposed a rotten system of corruption at all levels (North/Center/South) in the political systems (with a huge scandal and disenchantment which lasts until today).

Then Berlusconi all of a sudden came to power in 1994 luring the middle class by promising a (well overdue) libertarian reform of our aging Country: lower taxes, more jobs, leaner bureaucracy, reduction of the State’s footprint on the market, more freedom in the economy, etc.

Obviously, no reform whatsoever was passed in more than 20 years of Berlusconi reign, but quite the opposite: all classes who had gained any privileges in the past 50 years (the most glaring examples being pharmacists, magistrates, notaries, lawyers, taxi drivers, doctors, untouchable public sector employees, journalists, Alitalia pilots, etc. – the list could be endless) lobbied very hard (and successfully) to strengthen their privileges against any possible reform of the Country: the Parliament confirmed again and again its complete inability to do what was the “right thing to do” regardless of the loud crying of each lobby unwilling to give up its privileges.

For almost 20 years the left/right political debate was focused exclusively on Berlusconi (and his unashamed attempts to pass countless “personal laws” to solve his own problems and to favour his companies and his acolytes) instead than reforming the Country.

To exacerbate the problem, the Vatican (still with a strong voting influence on the older generations) unashamedly sided with Berlusconi in exchange for the introduction of a body of medieval-style legislation allowing them to extend their influence on the population, increase their already massive fortunes and deny any liberal civil rights to the common people (e.g. prohibiting IVF, limiting abortion in public hospital because of “conscience” of doctors, limiting the availability of the latest anti-conceptional pills in pharmacies, thousands of “catholic religion” teachers (i.e. priests) hired by the public school system, real-estate tax exemption on the Vatican-owned properties used for commercial purposes (20% of real estate in Italy is owned by the Vatican), prohibition of same-sex marriages, lengthy and expensive procedures to obtain a divorce, etc.).

Now Berlusconi is almost 80 years old, he is not Prime Minister anymore and the Country has been in continuous recession for almost 10 years in a row.

Still, nothing has changed insofar as the political class (Left/Center/Right) still lacks both the vision and the guts to tell its people (the voters) that a large slice of the population has been living way above their means for decades and it is time to completely overhaul the core rules and mentality deeply rooted within our Country and waive the now unsustainable bureaucratic attitude & byzantine privileges which have been dragging us all so low.

Our current politicians prefer to blame the immigrants, the ISIS, Mrs. Merkel, the globalization or China for all the problems that Italy is facing.

5. Mr. Monti delusion

Most probably, if we look back at the past 5-10 years, Italy had the biggest chance to get some reforms being passed when Mr Monti was appointed as Prime Minister during the 2011 Euro Crisis and the Parliament was ready to pass anything in order to save face, as long as he took the blame in front of the people: very importantly, Mr Monti came to that seat after a strong academic career spent advocating for decades the liberalization of the economy both in Italy and in Europe, the reduction of privileges, etc. — also, he enjoyed the support of the vast majority of the over-taxed, over-working middle class (an ultra rare commodity in Italy).

Mr Monti was (or, better, appeared to be) the right man, in the right place, at the right time.

Nevertheless… rarely a man failed so much the hopes of his countrymen as Mr Monti did. He and his Ministries (some of them even more appalling than him, like Mrs Fornero) proved themselves completely detached from reality (typical academics living in a cloud, not knowing that devil is in the details), unaware of what the real issues were, and unable to achieve anything whatsoever except raising the taxes (he did not liberalize anything, failed to attack either the bureaucracy or the privileges of the many lobbies mentioned above, made a huge mess with an amateurish reform of the labour market, screwed the pension system, etc.).

6. What remains: an aging Country in ruins

We are now in 2015 and the youth unemployment is above 43%.
Almost half a million of (young, extremely well educated, specialized) Italians leave the Country every year to look for a job abroad.
Italy’s debt is above 136% of its GDP and still increasing.
The judiciary system is rotten to the core (according to OCSE, Italy ranks between Congo and Rwanda for the efficiency of its judicial system).

Most importantly, as many commentators in Italy and abroad have said, we are now witnessing a deepening breach of the social contract between younger and older generations: the younger Italians have no rights, no jobs, high taxes and no welfare. Older Italians have good pensions, free services, untouchable jobs, plenty of rights & welfare and feel entitled not to give up anything in favor of the younger generations.

This is a very complex question that has puzzled historians, politicians and economists for decades now.

As others have said, Sicily was once among the wealthiest regions in Italy until 200 years ago. Equally, Naples was considered a world capital until 19th Century, together with Rome and Paris.

There is a constellation of reasons why the South of Italy has lost its advantage compared to the Northern part of the Country and it is now among the less developed areas in Europe, no matter how many billions of Euro the Central Government and the European Union pump every year in the attempt to revive the South of Italy’s economy.

In particular:

1. Times have changed and culturally Southern Italians have been unable to adapt: the southern part of Italy was an agriculture-based Economy for centuries. In the last 150 years agriculture has lost its dominance over the Economy: first in favour of the Mechanical Industries (the Industrial Revolution sparkled by the Brits), secondly in favour of the Services Industries. Southern Italy missed completely both of these economic revolutions.

These huge missed opportunities had three main consequences that you can still notice today:

• Few risk takers: there is a very low entrepreneurial attitude among Southern Italians (especially the middle class): most of “the best and the brightest” (and there are many, very smart and able) end up in the Government bureaucratic machine not unlike what happens in Japan. This (and this only) is considered — work-wise — a “success” in the South of Italy, with the result that thousands and thousands of smart, young and very able Southern Italians of every possible root apply every year for any available vacancy within the bureaucratic machine. Jobs are simply “requested” by the base as a sort of “welfare” and award for the smart, hard-working & able, and not the natural by-product of a healthy local economy. Nowhere is thought to the younger generations that entrepreneurship is a valid option for the smart and able;
• No highly specialised service economy: as mentioned above, the service economy in the South of Italy has translated into bureaucratic jobs manufactured by the Italian central government for the sole purpose of giving jobs to the people in the (lame) attempt to revive the local economy. As a consequence, this has created enormous State-owned conglomerates with zero public usefulness and has instated an iron-clad mentality into people that the safest / best jobs anyone could find are those with the State (i.e. you cannot be fired and once you get the job, you are set for life). The Central Government originally fuelled this attitude by hiring more than 180k people from South of Italy in their internal bureaucracy just in the few years after the WWII. There was a huge inflow of Southern Italians all over the bureaucratic machine at all levels and, in a critical time of reconstruction of the Country, this destroyed the need for Southern Italians (or at least their middle class) to approach the real market and create jobs that were actually needed and not “manufactured” for political purposes. To date, it is estimated that in the South of Italy, 1/3 of the active population is unemployed, 1/3 works in private companies and 1/3 works for the State or State-owned companies. This means that half of the working population works for the State (with higher than average salaries and protections, compounded by ridiculously low level of productivity). Things are slightly improving now, but in the meantime the generation of our parents was lost forever.
• Structural lack of social mobility: children end up doing the same jobs of their parents. This is (unfortunately) a common trait of all Italians, but according to the statistics it is even worse in the South of Italy (and they love it like this).

2. Brain drain: for generations, the extreme poverty and structural lack of social mobility forced millions of bright, risk-taker, Southern Italians to leave the Country, in most cases in favour of Southern and Northern America. This prevented a cultural change at home, because the incumbent people with the “old” mindset had firmly the reins of the political, financial and administrative machine for generations and no change of mindset was conceivable to come from the system’s insiders (who traditionally have been profiting from the status quo for generations). In recent years, the emigration abroad was reduced thanks to substantial subsidies by the central government, while it increased the internal migration from southern regions to the north of the Country (in 2015 alone, 138k Southern Italians under 30 years old moved to the Northern part of the Country).

3. Organised Crime: in the last 150 years a small part of Southern Italians have developed a net of strong, violent and highly profitable criminal organisations with foothold in the social and political system of almost every city in the Region. This system sucked resources both from the (already lagging behind) economy and also from the Central Government investment in the infrastructure & health-care system (both among the most corrupted in Europe). These criminal organizations have been able to command the political agenda for decades, and, not unlike what happened in certain South Americans states, have been willing to corrupt and oftentimes even kill magistrates to escape justice and to deadlock any attempt by the central government to repress the crimes and reform the legal gray-areas that allow criminality to thrive (e.g. legalization of marijuana).

4. Higher rates of school abandonment: for decades, Southern Italy has seen higher rates of kids abandoning school at the early years of education.

5. Inefficient investments by the Central Government: the politicians have been unable to help the South of Italy economy in any way other than:

• colossal & useless infrastructures: like colossal bridges, dams, highways, aqueducts, etc. in most of the cases never going to be completed (or even pass the initial construction stages).
• subsidy of mega-factories from private companies (most of them would relocate elsewhere once the subsidy ended: e.g. FIAT Auto);
• Periodically hiring a ridiculously high amount of people in the Public Administration before any election cycle (e.g. the Municipality of Naples has now accumulated approximately 20k employees, Rome 23k). These public sector employees are heavily unionized and are able to blackmail any government (local or central alike) willing to update the rules governing their employment, de facto preventing any possible reform of the system which is still the same of 40–50 years ago (fantastic privileges and normal rules pertaining to the private sectors do not apply to them). In Rome there was a three-day strike by basically all the Municipality employees once the Major of the town proposed to remove their fake “productivity bonus” — a subsidy given to all Municipality employees without any productivity requirement even checked. Many of these employees are not even required to show up for work: a job in a Municipality is regarded nothing more, nothing less than a sort of welfare subsidy for the employees’ family, without any requirement to carry out any actual job whatsoever.

The politicians managed to damage the economy even more by regularly awardingpublic procurement contracts to companies connected with the organised crimes.

6. High level of corruption among Public Officials and State Employees: this is very unfortunate and, until very recently, purposely only blandly punished by the law. The phenomenon is widespread across all sectors and levels of the bureaucracy, political parties, State-owned entities, and it greatly contributed to the draining of resources from the legitimate economy. The former President of Region of Sicily (the highest seat in one of the most populous Italian regions) just finished serving a 7-year jail sentence for being a Mafia-aide. Mr Marcello Dell’Utri, who for a lifetime has been the right-arm of Mr. Berlusconi, is currently in jail in Rome for a similar sentence.

7. Huge “underground” economy: to exacerbate the problem, hundreds of thousands of people are employed in the economic system completely un-registered. These people are often-times paid very low-salaries, have no social-security, do not pay taxes, etc.

8. Ineffective Rule of law: in the southern part of Italy the Government has traditionally weaker control of the territory. For decades, this allowed all sorts of behaviour by people willing to breach the Law with impunity (e.g. 1) tens of thousands of houses built in environmentally protected areas — particularly in Campania, Sicily and Calabria; 2) one of the lowest tax compliance in Europe; 3) millions of civil and criminal proceedings for petty claims.

I can answer for Italy alone, as I do not have any knowledge of the Spanish economic fabric.

Regarding the stubbornly high youth unemployment rate in Italy (now back above 40%, as of January 2017 and it has been hovering above 35% since 2009), there are multiple reasons behind it:

A. The Italian State genuinely hates entrepreneurs: it is basically impossible to do business in Italy. Those doing a business in Italy should be considered modern heroes, in my opinion. There is a constellation of bureaucratic hurdles, notaries, accountants, lawyers, whatever, that you are forced by the law to consult (and pay hefty fees) even BEFORE you start a business. After you start it, there will be a multitude of completely irrational tax deadlines with draconian penalties (that change every year), bureaucratic checks, useless controls, etc. that actively make your business frankly impossible. Bureaucrats live in medieval times, detached from reality, and they hate businessmen & risk-takers.

B. Lack of financial credit. Italy lacks a modern and efficient banking system. Money is lent by banks to friends, friends of friends, relatives of friends, etc. This approach proved disastrous and was able to take very important financial institutions (like Monte dei Paschi di Siena, the 3rd largest bank in Italy and Banca Popolare di Vicenza) to collapse because of Non Performing Loans generated by a handful (0.01%) of clients.

C. Closed market sectors: this is the elephant hiding behind the curtains of the room. In Italy entire market sectors are purposely closed to competitors (i.e. newcomers) in order to maintain the good life of the incumbents. Nobody is willing to touch the incumbents’ privileges because any action against them would be politically very pricey. Pharmacists, Notaries, University Professors, Taxi Drivers, etc. are just a few examples of ferocious pressure groups that have been able to blackmail and eventually force the legislator for decades to prevent by the law any innovation in their relevant sectors so to close their markets to any potential competition. Many excellent Pharmacy Graduates, Law Graduates, or would-be Taxi Drivers (these are just examples) are not able to enter the market and do their job because there is an artificial limit legally set forth by the State to the lucky few “members” who are allowed to practice that profession. Regardless how high is the youth unemployment rate, the legislator will not open these markets to new players as the existent ones would have to face new competition (and, potentially, compressed profits).

D. Secondary school system (particularly Universities) is totally detached from reality, living in a universe where the actual job you will be asked to do is completely irrelevant. After the students will graduate, they will not have acquired any set of skills useful in the market. Once you will have spent 4–6 years to get a degree, you will need to start from scratch to learn the skills needed in the market. (I have been suggested by Luca Accomazzi that this situation is currently improving).

E. As other answers here have already stated, the judiciary system in Italy is purposely archaic and inefficient: if you need to recover a debt, be ready to wait years while you carry out expensive litigation, and the result is far for certain thanks to the many loopholes that Italian lawyers are able to exploit to delay and eventually avoid to repay their clients’ debts.

I hope this helps.