Italy's entrepreneurs urge faster reform amid weak economy warnings

ROME (Xinhua) - The Italian industrial circles have called on Prime Minister Matteo Renzi to not lose a minute in reforms amid international warnings of a weak economy despite the "encouraging intentions" of the government.

It emerged from gatherings of entrepreneurs and retailers over this week that strong support for Renzi and his reforms shown in last month's European elections must not be wasted but should be buttressed with fast action as the only possibility to make Italy safe from any new economic relapses.

Entrepreneurs said they have hope in Renzi. But their "fixed-term confidence" will depend on the government's ability to introduce the promised changes, the young division head of influential industrial association Confindustria, Marco Gay, said at the group's annual meeting that ended on Saturday.

The contraction in Italian economic output recorded since mid-2011 came to a halt at the end of 2013, mainly thanks to foreign demand and to the reduced need for fiscal adjustment. But numerous weak indicators and especially the seriousness of unemployment figures have highlighted that recovery is struggling to get under way.

In the first quarter of 2014, Italy returned to negative growth and lost more than 12,000 commerce and service firms, after businesses have gone to the wall at record rates amid the longest post-war recession. Youth unemployment has recently hit an alarming 46 percent.

A study by Censis social research institute released on Saturday said foreign investments in Italy were 58 percent less last year compared to 2007. The crisis has affected all advanced economies, but loss of attractiveness for foreign capital was considerable in Italy, Censis pointed out.

The grim economic picture has led Italy's largest confederation of retail traders Confcommercio to estimate earlier this week that it will take more than 11 years for the country to get back to its consumer spending levels before the outbreak of global financial crisis in 2007.

Furthermore, days after the European Commission (EC) made a list of economic recommendations for the Mediterranean country, the confirmation of BBB rating and negative outlook for Italy from rating agency Standard & Poor's (S&P) came as a wet blanket on Friday.

A huge public debt, which is at around 133 percent of gross domestic product (GDP), and tight credit conditions for companies were constraining the ratings on Italy, the U.S. agency said, defining the Italian prospects for growth as "weak" both in real and nominal terms.

Regarding the Renzi government, S&P highlighted the "important progress" made on budget and structural reforms adding, however, adding that despite the "encouraging intentions" it was "too soon to judge how much of the programs can be implemented and over what time of period."

Administrative, fiscal and justice measures - as well as, not least, an anti-corruption reform following a series of major scandals in politics - are on the Renzi agenda ahead of July 1, when Italy will take over the rotating presidency of the European Union (EU).

Again on Saturday, speaking at a conference in Naples, an important city in the troubled south of Italy, the youngest ever prime minister in Italy, 39, said his country has what it takes to overcome the problems and revive the economy.

So far the first steps made by his cabinet since it took power in February, including some measures to ease the labor market and unblock investments, have been evaluated as "positive" by industries, Maurizio Marchesini, the head of Confindustria in Emilia Romagna, one of the most developed regions in Italy, told Xinhua.

However, Marchesini added, time is running out for the country's economic system plagued by decades of missed reforms, and the "expectations for the Renzi government which are high on average among entrepreneurs" do not deserve to be disobeyed.