Not a Surprise: More Problems in Italy

Reuters published an article this afternoon about manufacturing within Italy, and it immediately sparked my attention because I’m headed there in January for the semester. Not surprisingly considering it’s Italy, but the article talked about the heavy corruption that led to the demise of a steel plant within Taranto in southern Italy.

            As the article introduces, the closing of the plant is problematic because Italy has been plagued by a slow economy and most afflicted by incredibly high unemployment. The government had tried to spur economic activity by taking over the company that ran the plant, but the government in Italy is notoriously corrupt—hence the (alleged) problems with bribery and scandal at the highest levels of the company.

            The article doesn’t address the following issue, but I found it relevant given our IPE discussions. Italy has long been a developed country, and yet it has fallen behind in comparison to the US, China, and even other European countries such as Germany. The country, as the article documents, is dependent upon the manufacturing sector of its economy and represents a focus on a less-advanced industry in comparison to other developed countries.

            Furthermore, the article mentions the “shrinking number of major manufacturing employers in the poor and underdeveloped south.” The issue reminds me of China, where wealth has not been effectively distributed to the more underdeveloped villages in the nation in comparison to the wealthy cities. And yet, Italy does not have the same excuse of massive size in comparison to China—much less infrastructure is needed.

            The bottom line is that the government’s early actions to bail out one manufacturing plant seem to be an ineffective bandaid on a bevy of larger problems. Corruption, ineffective infrastructure, and inequality are plaguing the nation and don’t appear to be disappearing anytime soon. It’ll certainly be an interesting semester.

Here's the link to the article: http://www.reuters.com/article/2012/11/26/us-italy-ilva-idUSBRE8AP0Z520121126