Italy slides into recession, darkening outlook for Europe

File photo shows an Italian flag on an empty street during the Euro 2012 final soccer match between Italy and Spain in downtown Milan July 1, 2012. (Reuters)
Updated 31 January 2019

Italy slides into recession, darkening outlook for Europe

  • Italy’s recession is one reason why the wider eurozone slowed in 2018
  • Italian Premier Giuseppe Conte sought to downplay the recession and placed the blame firmly on the trade spat between the United States and China

MILAN: Italy has fallen back into recession, intensifying concerns about the 19-country eurozone economy and a possible flare-up in the debt market jitters that have haunted the bloc in the past.
The Italian economy, the third-largest in the eurozone, contracted by a quarterly rate of 0.2% in the fourth quarter of 2018, the national statistics agency said.
Following a 0.1% drop in the previous three-month period, that means Italy is in a technical recession, defined as two straight quarters of economic contraction — just four years after its last one.
Italy’s recession is one reason why the wider eurozone slowed in 2018, along with uncertainties related to Brexit, the China-US trade spat and new vehicle emissions standards.
Though the eurozone is performing better than in the dark days of the debt crisis, which threatened to break up the euro currency, it’s still lagging the US economy, which is projected to have grown about 3% in 2018. As a result, unemployment in the eurozone is about double the US’s 4% at 7.9%.
The eurozone economy as a whole grew by a meager 0.2% in the final quarter, the same as in the previous quarter, according to provisional figures released Thursday by the Eurostat statistics agency.
It expanded by 1.8% in 2018 overall, its weakest rate in four years. That’s lower than had been anticipated a year ago when the bloc was expected to slow only slightly from 2017’s strong 2.4% rate.
The Italian economy has become an acute source of concern over the past few months, partly as a result of the new populist government’s spat with the European Union’s executive Commission over its budget plans, which has undermined business confidence and seen Italian borrowing rates in bond markets spike higher.
The government, elected against the backdrop of economic disappointment after years — even decades — of stagnant growth, wants to ramp up spending to get the economy going. It wants to provide more social security payments and to roll back pension reform.
The plan means Italy would not reduce its debt load, which at over 130% is the highest in Europe after Greece.
The EU Commission, still haunted by the memory of the debt crisis that required bailouts for a number of countries, has insisted that the Italian government rein back on its spending plans.
Italian Premier Giuseppe Conte sought to downplay the recession and placed the blame firmly on the trade spat between the United States and China, which he says has weighed on Italian exports.
“This is a transitory factor,” he told reporters in Rome.
The head of Italy’s UNC consumer advocate organization, Massimiliano Dona, said the weak figures raise questions over the Italian government’s prediction that the economy will grow by 1% in 2019. He said that could mean the government will have to adjust its spending plans.
Italy hasn’t been the only reason why the eurozone slowed in 2019. Germany, Europe’s biggest economy, suffered an unexpected contraction in the third quarter largely due to changes in emissions standards that hurt auto sales. And uncertainty over Britain’s exit from the EU has weighed on sentiment, as has the fear of a global trade war stoked largely by growing tensions between the United States and China.
Separate economic indicators point to further weakness at the start of 2019 and most economists expect a difficult period ahead if the main causes of uncertainty are not addressed soon.
“The continued decline in sentiment indicates that the underlying pace of growth has slowed even further,” said Christoph Weil, an economist at Commerzbank. “Uncertainty about economic developments in China, the unresolved trade conflict between the US and China and Brexit continue to weigh on the economic outlook for 2019.”


World’s biggest literature festival kicks off in Jaipur

Updated 24 January 2020

World’s biggest literature festival kicks off in Jaipur

  • Economist and Nobel laureate Abhijit Banerjee will attend the event

JAIPUR: The 13th edition of the Jaipur Literature Festival (JLF) started on Thursday.

Known as the “greatest literary show on earth,” the five-day event brings to one venue more than 500 speakers of 15 Indian and 35 foreign languages, and over 30 nationalities.

Among the festival’s participants are Nobel laureates and Pulitzer Prize winners.

The event has been expanding, with over 400,000 people attending it last year and even more expected to show up this time.  The growing crowd has made the medieval Diggi Palace, which hosts it, look small, and organizers are planning to shift the event to a bigger venue next year.

Scottish historian and writer William Dalrymple, one of the organizers, said: “The first time we came to the Diggi Palace in 2007, 16 people turned up for the session of which 10 were Japanese tourists who walked out after 10 minutes, as they had come to the wrong place. Things have improved a little since then. We are now formally the largest literature festival in the world.”

Dalrymple, who has extensively written on medieval India and South Asia, has played a pivotal role in promoting the festival.

The other two organizers are its director, Sanjoy K. Roy, and writer Namita Gokhale, who along with Dalrymple made the JLF become one of the most sought-after events in India.

“Why has the literary festival taken off in this country in this extraordinary way? It goes back to the tradition of spoken literature, the celebration of literature orally through the spoken word has deep roots in this country,” Dalrymple said.

“So the idea that a literary festival is a foreign import is something that can’t be maintained. We’ve tapped into something very deep here. Literature is alive and is loved in India,” he said.

Inaugurating the festival’s 13th edition, celebrated British mathematician Marcus du Sautoy said: “Every number has its own particular character in the story of mathematics. For me it is 13; 13 is a prime number, an indivisible number, and the JLF is certainly a festival in its prime.”

The festival this year is taking place amid a raging debate about India’s new citizenship legislation and mass agitation on the issue of preserving the secular fabric of the nation.

Reflecting on the prevailing mood in the country, Roy, in his opening remarks, said: “We are now faced with a situation where we see a spread of the narrative of hatred. Literature is the one thing that can push back against it and so can be the arts. All of us have a responsibility to do so and this is not the time to be silent anymore.”

Gokhale said: “Ever since its inception 13 years ago, we at the Jaipur Literary Festival have tried to give a voice to our plural and multilingual culture. We live in a nation which is defined by its diversity, and it is our effort to present a range of perspectives, opinions, and points of view, which together build up a cross-section of current thinking.”

She added: “We seek mutual respect and understanding in our panels — it is important to us that these often conflicting ideas are respectfully presented and heard. We also resist predictable and self-important all-male panels, and try to ensure that the vital voices of women resonate through all aspects of our programming.”

One of the attractions of the event this year is the presence of Nobel laureate Abhijit Banerjee, who won the prize in economics last year.

There are also panel discussions on Kashmir, the Indian constitution and history.

The prevailing political situation in South Asia is also reflected by the absence of Pakistani. Before, popular Pakistani authors would attend the JLF, but delays in visa issuance and a hostile domestic environment forced the organizers to “desist from extending invitations.”