Bank of Italy Governor calls for ‘well-constructed plan’ to relaunch economy

Governor of the Bank of Italy Ignazio Visco has called for a “well-constructed plan” to relaunch the country’s economy, one that balances long-term and short-term goals, after it was hit by the COVID-19 pandemic.

Visco made the remarks on Monday while speaking at an event featuring the release of the Bank of Italy’s annual report, reports Xinhua news agency.

His comments came a day after Prime Minister Giuseppe Conte concluded eight days of high-level economic consultations with an eye towards finalizing a comprehensive economic strategy by September.

In his remarks, Visco said a strategy should be announced as soon as possible, but he warned against indiscriminately cutting back on bureaucracy to increase economic efficiency.

“There is good bureaucracy and bad bureaucracy,” he said.

“Good bureaucracy is what we need to guard against short-term impulses. It is too easy to say we have to simplify everything.”

The Bank of Italy has predicted that the Italian economy will contract by between 9 and 13 per cent this year, due almost entirely to the impacts of the coronavirus pandemic.

Visco said that developments like the spread of the coronavirus make accurate economic forecasts challenging.

“We are proceeding with all economic scenarios, but the state of uncertainty we are in does not make reasonable forecasts possible,” Visco said, adding that this was not the case only for the coronavirus pandemic but for “all major factors of a geopolitical nature”.

He concluded that the “uncertainty does not mean we should do nothing… We have to make our best effort”.

Earlier in the day, the retailer’s association Confcommercio announced that Italy’s economy was on track to contract by 21.9 per cent in the second quarter of this year when compared to the same period in 2019.

Compared to the first quarter of the year, the contraction was 17.4 per cent, Confcommercio said.

Italy, one of the hardest-hit European countries, has so far reported 238,720 COVID-19 cases, with 34,657 deaths.