By Maria Elena Spagnolo
MILAN, Jan. 9 (Xinhua) -- Italy should invest more in research and development in a bid to boost its weak economy, as other world countries do, otherwise the country will gradually lose competitiveness, an expert told Xinhua in an interview.
Vittorio Valli, emeritus professor of Economic Policy at the University of Turin, said that Italian public opinion often blames globalization for economic difficulties and unemployment. Globalization has impacted Europe and Italy, he said, but the latter also suffers congenital weaknesses, which the Italian cabinets should address.
Italy did not invest enough in the 2000's and the growth rate was very weak already in the 1990's, he said. The country was not able to increase its technological content, and also its exports, which led to low performance in the international markets.
"From 1999 when Italy entered the Eurozone until 2013, the country had a strong structural deficit in the current account balance," which is a record of a country's international transactions with the rest of the world. While "other European countries like Germany and the Netherlands had a strong performance", Valli said.
Italy was therefore in a weaker position, similar as Greece. "This has meant that when the crisis exploded Italy had that weakness on the balance of payments and also a weakness on public debt so it found itself more exposed than other countries," the expert told Xinhua.
"Concerning public debt, Greece was more exposed because the great majority of the debt was held by foreign owners, while in Italy the public debt in the hands of foreign owners are some a third of the total," Valli said. Then when speculation has struck Greece the country has suffered more, while Italy has managed to stay upright, he added.
"In Europe the trend of globalization leads on one hand to the enlargement of the possibilities of exports and trade with emerging countries and other parts of the world, on the other hand, it contributes to the increase of economic inequalities within individual European countries," said Valli.
It also leads, sometimes, to a negative view of globalization by the people, he said.
According to a 2014 study, the Italian people negatively evaluated the effects of globalization, he noted.
"This happened because in Italy the main negative effects of globalization, namely the increasing economic inequalities, were amplified by the effects of the global crisis," he explained.
The public easily blames globalization, or euro, for economic difficulties, but the underlying problem has its roots in the 1990s, and probably in the period after 1973, when Italy started to lose competitiveness.
"The future is also linked to the political will," Valli believed. "Politicians and governments should have medium and long-term objectives. Without them, it is hard to achieve the needed structural reforms," he added.