Press Review #SoseXpress 26 June-02 July2021

We are aware that effective gender equality improves the development of our Country, fostering, producing and determining its social and economic growth and enhancing its life.

From the speech of the President of the Republic, Sergio Mattarella, at the meeting with the Marisa Belisario Foundation.   

The debate of ideas 

 

The European Recovery and Resilience plans and their projects 

The European Commission has positively evaluated the recovery plans presented by the European member states. Albeit different from each other, the NRRPs meet the objectives set by the EU. The European Commission evaluated the projects based on country-specific recommendations and minimum spending requirements for the green and digital transitions (respectively 37% and 20% of the resources for each country) and some fundamental interventions (for example, more energy-efficient buildings or sustainable transport). Therefore, most investments are for energy,digital transition, and education. Here a detailed article published by “la Voce.”  

 

Federalism and the health crisis 

In Italy, as in other European countries, the Covid-19 emergency put healthcare facilities on the test, highlighting weaknesses, delays, management problems, and a confused attribution of responsibilities. For example, in Italy, both Regions and the Government are responsible for health protection and, although decentralization was not the main cause of the problems arisen during the pandemic, the health crisis reopened the old debate on federalism. The management of the health crisis became a litmus test highlighting critical issues. Here a detailed article published by “La Voce.” 

 

Measuring poverty: The lessons learned from the pandemic

The pandemic has increased the number of households and children living in absolute poverty. Istat estimated that families and children living in this status increased from 6,4% to 7,7% and 11,4% to 13,5%, respectively. On the other hand, the share of households in relative poverty decreased. The contrasting dynamics of the two indicators measuring the same phenomenon linked to the weaknesses emerged during the pandemic require reviewing the approach to poverty measurement. Here to learn more. 

 

Studies, research and numbers

 

The Bank of Italy: Survey on Industrial and service firms – Year 2020 

In 2020, the Italian production system was hit hard by the COVID-19 pandemic. Sales declined by 8.6 per cent; the contraction in turnover affected most firms particularly in the sectors more directly impacted by the measures adopted to contain the virus. The Bank of Italy reveals these data in the survey on industrial and service firms – Year 2020. According to the note, hours worked fell by 10 per cent, although the number of persons employed decreased by 2.4 per cent, thanks to the freeze on dismissals and the widespread recourse to wage supplementation schemes. The average growth in selling prices slowed to 0.9 per cent. Here the note by the Bank of Italy. 

 

Intesa San Paolo: industrial districts resumed exports in the first quarter of 2021 

In the first quarter of 2021, the exports of industrial districts rose by 6% (at current prices) compared to the first three months of last year. The Intesa San Paolo Research Department revealed these data. The study reports a significant increase for household appliances (+29,8%), metalworking industry (+23,9%), strongly affected by the rise in production prices, and furniture (+15,1%), followed by mechanical engineering industry (+7%) and metal products (+6,9%). A slight increase was recorded in the exports of building materials and products (+2,3%), food and beverage (+1,9%), and other intermediate products (+1,8%). In the fashion industry, albeit marked decreases in the export of intermediate goods (tanning and textiles – 25,2%), consumer goods districts showed significant recovery signals (apparel, leather, shoes, and jewellery +5,2%). Here the note by the Intesa San Paolo research Department.  

 

Istat: in May + 36 thousand employed persons compared to pre-Covid time

According to Istat estimates, in May 2021, the number of employed persons increased compared to April, while unemployed and inactive persons decreased. The statistical Institute explains that the employment growth (+0.2% +36thousand units) involved men, fixed-term employees, and under35s. The unemployment rate fell to 10.5% (-0.1 pp) and 31.7% (-1.1 pp) among young people. Comparing the March-May quarter and the previous (December 2020 – February 2021), Istat estimated an increase in the employment rate of 0.3%, equal to 74thousand units and in the number of people seeking employment (+2.8%, +72thousand), while inactive people aged 15-64 years decreased significantly (-1,5%, equal to -209thousand units). Here the note by Istat. 

 

Istat: In the first quarter of 2021, the General Government's net borrowing rose to 13.1%. Household income up by 1.5%, consumption down by 0.6%, purchasing power up by 0,9% 

According to Istat estimates, in the first quarter of 2021, the General Government net borrowing to Gdp ratio was 13.1% (10.6% in the same quarter of 2020) due to the financial measures to support households' and enterprises' income which overcame revenues. The data published by Istat on the disposable income of consumer households show an increase of 1.5% compared to the previous quarter, while consumption declined by 0.6%. However, Istat explains, in real terms, the gross disposable income of consumer households increased by 0.9% due to an upward trend in savings. Here the Note by Istat. 

 

PMI IHS MARKIT: In June, the Eurozone manufacturing PMI broke new records 

In June, the Eurozone manufacturing sector reached a new record for the fourth consecutive month, rising to a new high of 63.4 from 63.1 in May. The index remained above the 50% threshold that separates expansion from contraction for the twelfth consecutive month. All three subsectors experienced significant improvements in the operational conditions. In line with the last trend, capital goods producers recorded the strongest growth, followed by intermediate goods producers, who recorded the highest PMI in the survey history. Consumer goods producers continue to lag, albeit the strongest growth since June 2000. Here to learn more. 

 

Istat: industrial producer prices on the rise 

In May 2021, industrial producer prices rose by 1,0% on a monthly basis and by 8,0% on an annual basis. Istat highlights that industrial producer prices rose in almost all sectors over the last three months, while the upward trend on an annual basis derives from the increased prices of energy, basic metals, and metal products. On the domestic market, prices increased by 1,3% compared to April and by 10,0% on an annual basis. Excluding the energy sector, prices increased by 1,0% in the last quarter and by 4,2% compared to the previous year. On the non-domestic market, prices increased by 0,7% in the last quarter (+0,9% in the euro area, +0,5% in the non-euro area) and rose by 3,5% on an annual basis. Here the note by Istat.  

 

Istat: In the first quarter of 2021, the House Price Index up by 1,1% 

The House Price Index (HPI) measures the evolution of market prices of all residential properties that are purchased by households for own-occupancy or as an investment. 

According to Istat preliminary estimates, in the first quarter of 2021, the House Price Index (Italian acronym IPAB) increased by 1.1% compared to the previous quarter and by 1.7% compared to the same quarter of last year (it was +1.5% in the fourth quarter of 2020). The increase is due to the prices of new dwellings, which grew by 3.9%, and existing dwellings that rose by 1.2%. The rise of HPI occurred in the context of the sharp increase of the volumes of sales (+38.6% the annual rate of change registered for the residential sector in the first quarter of 2021 by the Observatory of Real Estate Market belonging to the Revenue Agency). Here the note by Istat. 

 

Eurostat: economic sentiment hit a 21-year high 

After the pandemic crisis, in June, the Economic Sentiment Indicator rose in the Eurozone, reaching the highest level in the last 21 years and confirming a strong post-Covid recovery. The indicator increased to 117.9 pp compared to 114.5 p.p. in the previous month. The Directorate-General for Economic and Financial Affairs of the European Union released these data. Here to learn more. 

 

The voice of Stakeholders 

 

Unioncamere: The Public Administration will need 741 thousand employees in five years 

The Italian Public Administration will need 741 thousand new employees in the next five years. 692 thousand of them will replace retired employees, and about 49 thousand will be new hires. These staffing needs were estimated by Excelsior, the IT system of Unioncamere, and Anpal. According to Unioncamere, civil servants are about 3,2 million, the lowest level in the last 20 years with a decrease of 3.9% in the last ten years. In relation to the population size, it is the lowest level in Europe. Today, Unioncamere reports, the PA is "old": 55% of civil servants are over 55 compared to 37,3% of employed people. Only 4,2% are under 30, and the average age is 50.6 years." "Finally, six out of 10 civil servants are not graduate, two-thirds of graduates have a legal-administrative background with few Stem degrees (science, technology, engineering, and mathematics) and technical-professional degrees. Here the press release by Unioncamere.

 

Transition 4.0 promotes investment in machinery, +3.5% in the first quarter of 2021 

The business confidence climate index marks further progress continuing the positive trend started in December 2020. In the first quarter of 2021, business investments exceeded expectations rising by 3.7% in construction, and 3.5% in plants and machinery, 1,5% more than the European average. According to the Confartigianato Study Centre, business investment readiness is supported by digital transformation and technologies 4.0. More investments have positive effects on economic growth, productivity, innovation, and energy efficiency. Here the note by Confartigianato Study Centre.  

 

Confindustria Study Centre: faster restart and more robust GDP recovery in the second quarter 

According to the note published by the Confindustria Study Centre in the last issue of Congiuntura Flash, in the second quarter, the Italian GDP increased rapidly in a context in which consumption and services are resuming, and investments and industry are strengthening. The data on the confidence climate in June were also positive, and the index among businesses and households has returned to pre-crisis levels. The confidence climate has recovered; orders and credit increase, and interest rates remain low. Italian exports are also growing above pre-crisis levels, thanks to increasing world trade. According to Confindustria, this trend is due "to the acceleration of vaccinations, which favoured a restart of services 1-2 months earlier than expected". Here the note by Confindustria. 

 

Confcommercio: Households’ income and purchasing power on the rise 

Italian households’ disposable income and purchasing power increased in the first quarter of 2021 after the decline registered in the fourth quarter of 2020. Istat reveals these data highlighting an increase in savings due to a drop in consumption. The purchasing power also increased by 0,9% compared to the previous quarter. Here to learn more.  

 

Innovation 

 

The 75 top cities in the world for smart working  

Melbourne leads the ranking of the most attractive cities for smart workers. Rome ranks 62° out of 75 cities in the world investigated by Nestpick, the platform to search for mid-to-long term rentals, which evaluated the most appropriate accommodation for “digital nomads.” The low position (nearly at the bottom of the list) is due to high costs, inadequate infrastructures, a legal framework unfriendly to “digital nomads,” and livability. The Italian capital also got a low score about digital infrastructures: 78.90 points for internet speed (download and upload) compared to 84 of Paris and 86.60 of Berlin. More in general, Nestpick highlights, internet speed, and taxation are the factors that burden Italy more than other foreign cities. Here to learn more. 

 

Data security: the German authorities requested the ministries to close their Facebook pages

It is a question of privacy: in Germany, the Facebook pages of Ministries and Government Agencies must be closed by the end of this year. The German Data Protection Authority decided that the social network does not comply with the European and German data protection regulations yet. The authority established that data transfer out of the national territory is possible only in specific cases. The focus of the debate is the transfer of data towards the United States, which, according to the European Union, do not respect the European users’ privacy using those data for commercial purposes. Here to learn more. 

 

Digital Innovation: in 2021, professionals will invest 1,8 billion  

Digital innovation is running in the professional studios of lawyers, accountants, labour consultants, etc. According to an analysis of the Observatory Professionals and digital innovation of Politecnico di Milano, the pandemic has speeded up the innovation process of legal and economic professions. The report estimates that professionals will increase their investments in technologies by 5.6%, approaching 1.8bln, by the end of the year. Only in 2020, 1.694bln were spent in this sector for technologies, with an increase of 7.9% compared to the previous year. Multidisciplinary studios recorded the highest expenditure (25,300 euro on average), the legal studios the most significant increase. The pandemic has accelerated the organizational change: 70% changed their client management, one-fourth is ready to rethink spaces and organizational models. Here to learn more. 

 

Local Authorities 

 

Local Authorities: local finances held steady in the pandemic year  

Despite the complexities also generated by the Covid-19 pandemic, the world of local taxes seems to have not suffered many shocks. Centro Studi Enti Locali analysed critical issues and contradictions. The local tax system is constantly evolving; taxes change name, nature, and scope of application, and it is difficult to keep up. However, the whole world of local taxes seems to have held the pandemic, recording a globally contained decline in finances in 2020. Here for more information. 

 

Minister Lamorgese adopted the decree allocating the 2021-2023 Urban Security Fund

The Minister of the Interior, in agreement with the Minister of Economy and Finance, Daniele Franco, and the State-City and Local Autonomous Conference, adopted the decree allocating the Urban Security Fund for the period 2021- 2023. The resources amount to 65 million euros, 15 million euros for 2021, and 25 million euros for 2022 and 2023. The decree provides for the allocation of 60% of the resources to 14 metropolitan districts according to the demographic criterion; 12% of resources to metropolitan districts in financial disarray or which have adopted a financial rebalancing procedure; 14% of resources to Municipalities for the “Safe Beaches” project; 14% of resources to Municipalities for the “Safe Schools” project. Here is the press release by the Ministry of the Interior. 

 

The world of MEF 

 

OECD and MEF announced the agreement on global minimum tax, signed by 130 countries 

OECD records a historic turning point with the tax reform agreement (which follows the agreement signed at the beginning of June at the G7). 130 countries, representing 90% of world GDP, joined the scheme of the global minimum tax, which will ensure the fair taxation of multinationals such as Google, Amazon, Facebook, and Apple wherever they operate. Only a small group of 9 Exclusive Framework members have not yet joined the Statement. The document innovates the old rules of the international tax system, which are no longer suitable in the context of a 21st century globalized and digitized economy. Even the Minister of Economy, Daniele Franco, expressed optimism, declaring "Positive news from the OECD. Confident for political agreement at the G20 in Venice". Here the Note by OECD, and here the press release by MEF. 

 

MEF: The State sector working balance improved by 10.4 billion in 6 months 

MEF announced that the working balance for the first half of the current year amounts to approximately 84,800 million, with an improvement of 10,400 million compared to the same period of 2020 (95,212 million). In June 2021, it is estimated at 15,800 million, decreasing by approximately 4,900 million compared to the same month last year (20,749 million). The improvement is almost exclusively due to the increase in tax revenues and social security payments suspended due to Covid and import VAT. Here the Press Release by MEF. 

 

MEF: moratoriums still active on loans amount to 128 billion 

According to MEF estimates, moratoriums still active on loan repayments amount to 128 billion, compared to 1.2 million suspensions granted. At the same time, the requests for guarantees on loans for micro, small and medium-sized enterprises submitted to the Guarantee Fund for SMEs exceed 182 billion. The Fund 'Garanzia Italia' of Sace provided loan guarantees for 26.1 billion euros out of 2,618 requests received. These results emerge from the survey carried out by the task force for the implementation of the measures to support liquidity adopted by the Government during the Covid-19 emergency. The task force includes the Ministry of Economy and Finance, the Ministry of Economic Development, Bank of Italy, Italian Banking Association, Mediocredito Centrale, and Sace. Here the Press Release by MEF. 

 

MEF extends June payment deadlines for taxpayers applying ISAs and flat-tax regime 

Considering the Covid-19 impact on smaller taxpayers and their intermediaries, the Ministry of Economy and Finance extended, by a Prime Ministerial Decree, the deadline for the 2020 balance payment and the first 2021 down payment of income tax and VAT for taxpayers applying the Synthetic Indices of Reliability (ISA) and flat-tax regime. Here the Press Release by MEF.