Mauro Congedo has been finding and renovating small architectural treasures with his brother and father for 25 years in Salento — a peninsula in the southeast of Italy that makes up the “heel” of the boot-shaped country.
The apartments and houses that Congedo restores in this rather remote region are now suddenly finding buyers from Germany and England.
“Things are going well again,” said the 50-year-old architect.
During the coronavirus pandemic, business almost came to a standstill. But what happened afterward in Italy’s industry was “crazy” he says, dragging out the “a” for a long time.
Congedo isn’t the only one enthusiastic about the economic recovery in Italy.
Architect Mauro Congedo works in the Salento region, which offers a lot of coastlineImage: Yuriy Brykaylo/Pond5 Images/Imago Images
Italy goes from problem child to head of the class
While governments in Rome were used to announcing depressing growth forecasts and poor debt rankings in the years before the pandemic, the country is now quickly becoming Europe’s growth engine.
In the last quarter, the Italian economy grew by 0.6%, while the German economy shrunk by 0.3% in the same period. Beyond this short three-month snapshot, other figures for Europe’s third-largest economy are impressive, too.
“The Italian economy has grown by 3.8% since 2019,” Jörg Krämer, chief economist at Commerzbank, told DW. That is “twice as much as the French economy and five times more than the German economy.”
In Germany, the prospects are indeed looking bleak. The Organization for Economic Cooperation and Development (OECD) predicts growth of 0.3% this year for Germany. Leading German experts are only expecting growth of 0.1%. Italy’s economy, on the other hand, is expected to grow by 0.7% this year, according to the OECD.
The Italian stock market is also benefiting from the optimistic mood. The FTSE MIB benchmark index, which is made up of 40 big companies, rose by around 28% last year, more than any other European stock market indices. And Italy is on track for more growth.
Italy’s growth based primarily on new debt
It didn’t always look so encouraging. Economists initially reacted very cautiously when Giorgia Meloni became prime minister in October 2022. During the election campaign, Meloni and her Brothers of Italy party announced a nationalist “Made in Italy” economic course, agitated against migrants and did not clearly distance themselves from Russia.
After her election, the German weekly Stern described Meloni as the “most dangerous woman in Europe.”
But in terms of economic policy, Meloni has so far largely remained on the same course as her predecessor Mario Draghi. This course is paying off for Italy, at least on the bond market. The interest rate at which the county borrows money is back to the level of before she took office.
Things are currently going better economically for Giorgia Meloni than for German Chancellor Olaf ScholzImage: Kay Nietfeld/dpa/picture alliance
At a press conference earlier this year, Meloni tried to take credit for the economic upswing. Above all, the lack of political stability in the past had slowed the economy she said, speaking from a position firmly in the saddle.
But how much of the growth is down to Meloni’s success?
“Not much,” said Krämer from Commerzbank. “The strong growth can be explained by Italy’s loose fiscal policy.”
That means Italy’s growth is based primarily on new debt. While the Italian state’s new debt before COVID-19 was 1.5% of gross domestic product (GDP), it has shot up in recent years and was 8.3% of GDP in the first half of 2023.
The country’s overall mountain of debt is growing, too. In January, the EU Commission estimated that it would exceed 140% of GDP this year and continue to rise in 2025. For comparison, in Germany the debt ratio is 66%, in France it is almost 100%.
Italians received huge state subsidies for construction projects
To help the economy, the Italian state has been funding various home renovation measures since the end of 2020. For some measures they pay around 50% of the cost, others get even more. The most popular is called the “Superbonus 110” for energy-efficient renovations. Through this program anyone who renovated their house or apartment to make it more energy-efficient got the entire expenses reimbursed plus a 10% refund on top through a tax reduction scheme.
“You can imagine that construction investments have skyrocketed,” said economist and Italy expert Krämer. “This effect explains two-thirds of the strong growth we are seeing.”
Italy: A village at the end of the world
Architect Congedo is not overly enthusiastic about the Superbonus 110 program. Everything has become more expensive. On top of inflation, the program drove up the costs of materials and workers.
“If the state pays for everything, then people don’t care how much it costs,” said Congedo. In addition, no one controls the prices. Construction companies from Naples, Bari and the provincial capital Lecce asked him several times to adjust his costs upward. “They wanted me to charge twice as much. I didn’t do it. It feels like stealing,” he said.
He thinks a bonus for the energy-efficient renovation of buildings is a good thing in general. However, owners should have to contribute to the costs and not just get it all from the government. Congedo doesn’t think too highly about Giorgia Meloni either. The only good thing she did was get the Superbonus 110 program under control, he says.
Money from the European Union keeps flowing
In fact, the ultra-right head of government has slowed down the Superbonus program introduced by the left-wing Five Star Movement. In 2023, it covered a maximum 70% of costs and this year up to 65% of the renovation costs.
Nevertheless, the tax credits resulting from the program will significantly reduce government revenue in the next few years. For the government in Rome it is probably very convenient that billions are still flowing — primarily from Brussels. Italy is one of the biggest recipients of the EU’s COVID recovery fund.
By 2026, almost €200 billion ($216 billion) will be paid out to Italy in the form of subsidies and loans.
“The Italian state must reduce its very high budget deficit by this time at the latest,” said Krämer. “If they only start saving then, this Italian growth miracle will probably end because they didn’t use the time for structural reforms.”
Congedo is worried that remnants of the Superbonus 110 program will remain for a long time: “The prices are very high, and we have incurred a lot of debt.”
Luckily, he won’t run out of work anytime soon. He’s currently working on eight projects at the same time.
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
