Italy: Business environment at a glance. Check it out:
(EIU Viewswire Via Thomson Dialog NewsEdge) COUNTRY VIEW
FROM THE ECONOMIST INTELLIGENCE UNIT
Policy towards private enterprise and competition
2006-07: Limited scope for privatisation. Political resistance at local level. Effectiveness of the antitrust authority and other sectoral watchdogs improves. Some measures to increase competition in sheltered service sectors
2008-10: The EU will press for the opening of markets for products and services, but resistance will continue in some sectors.
Policy towards foreign investment
2006-07: Some simplification of investment application procedures. Availability of financial incentives will be curtailed.
2008-10: The national development agency fails to make an impact. Foreign direct investment (FDI) inflows remain low.
Foreign trade and exchange controls
2006-07: Quotas and tariffs in line with EU practices. General textiles and clothing import quotas lifted on January 1st 2005, but some reimposed in mid-2005. Leather imports to the EU from China and Vietnam restricted.
2008-10: Full opening to textile imports from China in 2008. Non-tariff barriers to intra-EU trade in services to be reduced. If completed, new world trade round could lead to a reduction in agricultural protection in the EU from 2010 onwards.
Taxes
2006-07: Regional tax on productive activities (IRAP) raised in some regions, but may be replaced. Reform of taxation of financial investment income and possible reintroduction of inheritance tax. More reductions in labour taxes also expected.
2008-10: Overall tax rates stay high. Cuts in central government taxes are likely to be offset by higher local taxation. Cuts in employers' social security contributions limited by failure to cut state pension outlays. A shift from direct to indirect taxes.
Financing
2006-07: Damage to financial market confidence caused by problems at the central bank gradually repaired. Minor improvements in corporate governance rules. More foreign banks enter the market, accelerating mergers of Italian banks.
2008-10: Competition from foreign banks will increase. Stockmarket capitalisation as a share of GDP will stay low.
The labour market
2006-07: The new government may restrict the use of temporary and fixed-term contracts. Opposition to broader reformscontinues.
2008-10: Union opposition to greater wage differentials and fewer restrictions on dismissals likely to continue.
Infrastructure
2006-07: Fiscal constraints, limited private-sector involvement, bureaucratic obstacles and resistance from local interest groups hinder government efforts to revive much-needed investment. EU funding will decline from 2007.
2008-10: Italy's infrastructure lags further behind the rest of the EU as a result of a lack of investment.
Copyright 2006 Economist Intelligence Unit
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