Italy's Political and Economic Strengths

H.E. Sergio Mercuri, Italian Ambassador to Korea

SEOUL, February 19, 2013  Italian Ambassador to Korea, His Excellency Sergio Mercuri gave a lecture titled “Italy on the Eve of the General Elections” at Asia Society Korea Center’s Monthly Luncheon Series. This lecture was the second of the Korea Center's Ambassador Series, launched this year to discuss relations between Korea and countries where government changes have occurred or will take place in the near future.

The Ambassador said Italy is a parliamentary democracy not a presidential system, since the first united Italian parliament was formed in 1861. In Italy the European Union and parliament function as main political actors, with the prime minister taking responsibility for both the Italian government and EU bodies. When Prime Minister Mario Monti was featured on the February 2012 cover of Time magazine, the headline read, “Can this man save Europe?” not “Can this man save Italy?” This highlights how the new Italian government should also take charge in designing and implementing the policies of EU institutions, so long as the Italian economy and politics remain closely linked to those of Europe.

The Ambassador acknowledged that the past few years have been difficult for both Italy and Europe. The European financial crisis greatly affected employment, domestic consumption, and finance in Italy. The Italian government’s measures were focused on reducing fiscal deficit to consolidate finances. As a result, primary surplus has increased since balance turned positive in 2012 and is expected to account for 5 percent of the gross domestic product in 2015. While public debt is greater than the GDP, 66 percent of it is locally-owned, with the size of household and company debt being relatively small. He also pointed out that the new Italian government should expand service and energy industries for further growth while downsizing manufacturing sectors. The Ambassador summarized Italy’s strengths as greater continuity and reduced volatility in the government’s measures and a stable economy that is less subject to unexpected changes.

Changing the subject to Italian ties with Asia and Korea, the Ambassador emphasized that the series of visits last year to Northeast and Southeast Asian nations, including Japan, China, Singapore, Vietnam, Myanmar, Indonesia, and Brunei, signals a greater role these countries play in trade with and financial investment in Italy. Their signing of more free trade agreements and an increasing demand from their growing middle class for quality products from Italy, further encourage a rise in Italian exports to Asia. When asked about the foreign merger and acquisitions environment in Italy, the Ambassador listed several examples of acquisition, saying that there is a national will to promote overseas firms’ brokerage activities. Finally, the Ambassador called attention to EXPO Milano 2015 where worldwide partners will be able to build strategic relationships with global institutions, policy makers, and businessmen.