Three years into Giorgia Meloni’s tenure as prime minister, her government stands out as one of Italy’s most enduring in recent decades, defying early skepticism about its longevity. Over the past ten years, the country has seen six different administrations—an average of one every 1.7 years—highlighting a history of political instability. While Meloni has brought a measure of governmental continuity, the nation’s economy continues to lag behind many of its European peers. n nEconomic forecasts remain modest, with ISTAT projecting GDP growth of approximately 0.6% in 2025 and 0.8% in 2026. Business leaders, once supportive of Meloni’s steady leadership, are now urging her to accelerate promised reforms aimed at revitalizing Italy’s sluggish economic performance. n nJoseph Gulino, managing partner at DRRT and legal advisor to firms across Europe and the U.S., emphasized the urgency of structural improvements. He argued that offering incentives for enterprise, simplifying procedures for launching and expanding businesses, and attracting skilled professionals could significantly boost economic momentum and shift international perceptions about doing business in Italy. n nAccording to Gulino, the challenge extends beyond bureaucracy—it is also psychological. Decades of inconsistent policies and administrative hurdles have led global investors to view Italy as a complex and slow market. Even with ongoing efforts to streamline regulations, such as the review of the Testo Unico della Finanza (TUF), the perception of inefficiency persists. n nThe TUF, often referred to as the cornerstone of Italy’s financial regulatory framework, governs capital raising, banking operations, investor protections, stock listings, corporate transparency, and penalties for insider trading. A modernized version could help attract more companies to Italy’s underdeveloped capital markets, where firms traditionally rely on bank loans rather than equity financing. n nMeloni’s much-publicized tax reform initiative has raised expectations, but tangible outcomes have yet to materialize. The multi-year fiscal overhaul, launched in 2023, aims to restructure personal income tax brackets, revise corporate taxation, simplify VAT procedures, and promote pro-growth policies. However, many changes remain partial or temporary, leaving business groups like Confindustria calling for clearer, more comprehensive measures. n nConfindustria president Emanuele Orsini stressed the need for collaboration between government and industry, warning against using fines as a revenue source. He argued that true simplification means helping firms comply with rules, not penalizing minor administrative errors. n nItaly’s industrial sector shows mixed signals. While companies like Pirelli and Iveco remain attractive to foreign buyers—partly due to the value of the “Made in Italy” brand—the banking industry struggles with scale and cross-border integration. Gulino pointed to UniCredit’s attempt to acquire Commerzbank as an example of stalled ambitions in creating pan-European financial institutions. Although regulatory approval allowed UniCredit to increase its stake to 29.9% in 2025, resistance from German management and labor unions has blocked a full merger. n nMeanwhile, UniCredit’s bid for Banco BPM collapsed in July due to Rome’s imposition of “golden power” conditions and repeated regulatory delays, which unsettled investors and led to the withdrawal of the offer. These setbacks underscore deeper structural challenges: a fragmented corporate base, low productivity, cumbersome bureaucracy, and slow judicial processes. n nShallow capital markets and high input costs further constrain growth. With public debt at around 137.9% of GDP—second only to Greece in the EU—Rome must maintain fiscal discipline to preserve its credit rating and manage borrowing costs. This limits the scope for large-scale stimulus or tax reductions. n nAs Meloni navigates this delicate balance between austerity and investment, the next two years will be crucial. With national elections approaching in 2027, time is running short to deliver visible progress. Deputy Economy Minister Maurizio Leo recently described the reform agenda as a step-by-step effort to position Italy alongside leading global economies. n nFor Gulino and others in the private sector, the success of these reforms depends not only on policy details but also on the narrative Italy projects internationally. A credible image of openness, innovation, and predictability could, in itself, become a catalyst for renewed investment and growth. n
— news from Euronews.com
— News Original —
Italy’s business elite urge Meloni to act faster on economic reforms
Three years into her premiership, Giorgia Meloni has defied expectations when she was elected by holding together one of Italy’s most stable governments in recent memory. n nOver roughly the past decade, Italy has had six governments, meaning about one every 1.7 years on average — an extraordinary rate of turnover even by Italian standards. n nYet while political calm has returned to Rome, the same cannot be said for Italy’s sluggish economy. n nGrowth forecasts continue to underwhelm, and waves of frustrated business leaders are pressing Meloni to move faster on reforms she promised, which pledge to bring Italy to the heights of more prosperous European economies. n nAccording to a June 2025 projection by ISTAT, GDP growth will be around 0.6% in 2025 and 0.8% in 2026. n nPolitical stability into economic momentum n nAs Italy’s economy grinds along with one of the weakest growth rates in Europe, pressure is mounting on Meloni to turn her government’s political stability into tangible economic momentum. n nBusiness leaders who once praised her steady hand are now calling for speed and substance in reforming the country’s overburdened tax, banking, and regulatory systems. n nFor Joseph Gulino, managing partner at DRRT and a lawyer advising companies across Europe and the US, the stakes could not be higher. n n“Providing incentives for businesses, streamlining process for starting and expanding businesses, and promoting the influx of talent or brain gain will go a long way to create growth and change common misconceptions about doing business in Italy,” he told Euronews. n nThe perception gap n nItaly’s problem, Gulino suggests, is not only bureaucratic — it’s psychological. n nDecades of red tape and policy inconsistency have left global investors wary. Even as Meloni’s government trims administrative procedures and commissions new reviews of financial regulation (the Testo Unico della Finanza), the perception that Italy is a complex and slow place to do business persists. n n“Not only tax credits but also removing administrative and bureaucratic burdens will make Italy more competitive — or will make it seem that way — and the perception is reality,” Gulino said. n nA reputation for efficiency, he believes, can itself become a driver of economic renewal. n nOften described as Italy’s “rulebook for financial markets”, the Testo Unico della Finanza sets out how companies can raise capital, how banks and brokers operate, and what protections investors are guaranteed. n nIn practice, it governs everything from stock listings and corporate transparency to penalties for insider trading — making it central to any effort to modernise Italy’s financial system. n nMeloni’s government has launched a review of the TUF to simplify listings and attract more firms to Italy’s underdeveloped capital markets, where most companies still rely on bank lending rather than equity financing. n nSymbol vs. substance n nMeloni’s much-touted tax reform is one area where expectations are high. The government has promised simplification and consistency, but business leaders are still waiting for results. n nThe multi-year riforma fiscale empowered ministers to overhaul the country ‘s tax system in 2023 over a roughly two-year period by reshaping personal income tax brackets, revising corporate tax rules, streamlining VAT, and boosting a pro-growth framework. n nGulino acknowledges that change is in progress but warns against overpromising immediate transformation. Many reforms remain partial or temporary, which is why business leaders say they are still waiting to see the full simplification take hold across the system. n nThe ministries and representatives of Italian industry are now locked in a public debate about how exactly the tax reform should take place. n nAccording to Confindustria, Italy ‘s main business lobby, the reforms are “an important signal of dialogue, but there’s still useful work to do on several points to clarify the substance of the proposals”. n nConfindustria president Emanuele Orsini made the comments after presenting the group’s simplification plan to the government in June. n nOrsini argued that the government needs to work with businesses to minimise the situations where the government is too eager to punish companies for alleged non-compliance. n n”Fines cannot be considered a structural part of revenue,” he continued. “Simplification, in fact, means helping businesses comply with regulations, moving beyond an approach that views errors, even formal ones, as a way to raise funds,” Orsini explained. n nBanking and the bigger picture n nItaly’s corporate landscape tells a more complex story than growth data alone might suggest. n nThe country’s major industrial players, such as Pirelli tires or truckmaker Iveco, remain coveted by global buyers, although its banking sector continues to struggle with scale and consolidation. Gulino points to this divide as emblematic of Italy’s uneven economic performance. n n“The numbers here might not tell the whole story,” he explained. “We know that through mergers and acquisitions, some large Italian companies, especially in the fashion and automobile sectors, have been large and attractive targets of foreign purchasers — not just to gain a foothold in Italy and access to the market, but also for the intangibles, such as the Made in Italy label, that make products valuable.” n nYet where Italian industry is an export success, its banks have lagged in building scale. n n“Look at the dominance in the banking sector and attempts — thus far less than successful — for Italian banks to create Europe-wide banks, such as with UniCredit and its increasing ownership of Commerzbank,” Gulino said. n nItalian banking giant UniCredit has been building a large stake in Germany ‘s Commerzbank in an attempt to create a cross-border merger, receiving regulatory clearances in 2025 to go as high as 29.9%. n nBut no merger is happening yet, with Commerzbank’s management and leaders in Berlin remaining hostile to a takeover, and unions worried about job cuts. n nMeanwhile, UniCredit’s all-share bid for rival Italian bank Banco BPM collapsed in July after Rome’s “golden power” conditions and repeated regulator suspensions spooked investors, resulting in a withdrawal of the offer. A golden power condition is a binding requirement the Italian government can attach to a deal involving strategic sectors. n nThe structural drag n nDespite the potential of Meloni ‘s reforms, there are long-running structural bottlenecks holding Italy back, such as a business base dominated by under-scale firms, stubbornly weak productivity, notoriously difficult bureaucracy, and slow courts. n nShallow capital markets also make it harder to fund growth, while input costs for industry make continuous expansion more difficult. n nAll these frictions put a cap on Italian competitiveness and make it more challenging to translate tax tweaks or one-off incentives into sustained growth. n n“This is a bigger structural problem in the Italian economy that will take longer to resolve, as it is often a drag on competitiveness,” Gulino said. “There is also the issue of debt limits as part of the eurozone and maintaining its improving credit rating while reducing the spread in borrowing rates compared to other eurozone economies.” n nItaly’s high public-debt load, which sits at around 137.9% according to Eurostat, is the second-highest in the EU after Greece at 152.5%, far above the EU average. n nRome needs to therefore maintain fiscal discipline to protect its credit rating and keep bond spreads in check, which limits room for big stimulus packages or tax breaks. n nThat balancing act — between fiscal discipline and growth stimulus — is likely to define Meloni’s next two years in office. With elections due in 2027, she faces an increasingly narrow window to deliver visible progress. n nA moment to define the narrative n nEarlier this year, Italy ‘s deputy economy minister Maurizio Leo said: “piece by piece, we are implementing a landmark reform that will position Italy to compete with the world ‘s leading economies.” n nFor Gulino and many of Italy’s business leaders, the reform question now extends beyond technical details to the story Italy tells about itself. n nAs well as concrete reforms, a credible narrative of openness, innovation, and predictability is important when attracting investment to Italy. n n“Perception is reality,” Gulino said. “If Italy can project that it is a country where business can start, grow, and thrive easily, that story alone could start rewriting its economic future.”