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Who Is Really Paying For This Crisis?

How I explained in my previous article the crisis Italy is facing from the past 20 years has all the features to be structural rather than cyclical like the other European Countries (except for Portugal, Greece and Spain).

However, yesterday the Governor of Bank of Italy announced that the Italian economy is expected to recover starting from the last quarter of 2013 and showing then the "plus sign" at a very slow pace from 2014.

That's what do we all hope for the coming months along with a more stable political scenario and the approval of crucial reforms that have to do with the reduction of the unacceptable level of unemployment (especially among the young population) and the very high level of taxation and public debt.

This article is focused on the unemployment in Italy over the past 16 years (1996-2012) and in particular on the rate for the young population (less than 25 years old). They are indeed the real victim of this crisis, forced to leave their own Country to find a job or to accept to work under crazy conditions both in terms of salary (among the lowest in Europe) and working environment (i.e. overtime due to inefficiencies or understaffing).

Furthermore, career opportunities are not often related to meritocracy and the "performance culture" is something that permeates very slowly in the Italian labor market and the public sector in particular.

This how the unemployment "evolved" along the past 16 years in Italy:

According to Eurostat, in 2012 the unemployment rate in Italy was 8,9% with respect to the 10,1% of the Euro Area and the 5,2% of Germany. The graph above also shows also how the unemployment rate skyrocketed (+82%) during the period of the financial crisis (2007-2012) increasing from 4,9% to 8.9%

The scenario becomes even worse if we analyse the unemployment among the young generations:

Italy has always showed incredibly high level of unemployment (35,3% in 2012), far above the average of the Euro Area and more than 4 times the level of Germany in 2012 (8,1%). In addition, the same steep increase for the unemployement rate among people between 25 and 74 old can be seen among people younger than 25 years old (+74% from 2007 to 2012).

They are paying a very high price for this crisis without being responsible for that and we hope that this will stop soon and a new perspective of growth will come and will payoff their sacrifices.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.