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Edition February 3, 2017 - Crédit Agricole S.A.
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  • Edition February 3, 2017

    Italy vs Spain: do fundamentals justify trade?

    Markets and institutional organisations favour a better recent dynamic in Spain, while Italy stands out as benefitting from a better status on various economic dimensions. Spain has started earlier implementing a series of post-crisis structural reforms, while Italy was standing on a better reform track in the 1990s. The latest impressive round of Italian structural reforms is too young to unveil their impact and has not been fully taken into account by observers.

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  • Contents:

    - STRUCTURAL CHARACTERISTICS
    - STRUCTURAL REFORMS
    - CRISIS EXIT-STRATEGY AND RECENT PERFORMANCE
    - POLITICAL RISK
    - BTP VS BONO

  • Extract – Spain has been more reactive than Italy in adjusting imbalances generated by the crisis

    Spain has started earlier implementing a series of post-crisis structural reforms, while Italy was standing on a better reform track in the 1990s and has reacted lately to adjust imbalances generated by the crisis. The latest impressive round of Italian structural reforms is too young to unveil their impact and has not been fully taken into account by agencies nor by international institutions.
    Labour market reforms have more specifically aimed at reducing wages in Spain. Rising unemployment has also contributed to wage deflation. The stronger adjustment in Spanish employment has also generated productivity gains. Competitiveness was highly improved justifying strong gains in market shares in spite of a less performant manufacturing base.

  • Employment: more dramatic adjustment in all sectors in Spain, notably in construction

    Facing a similar impact of the crisis on activity, Spain has responded with a more dramatic adjustment in employment and labour costs than Italy. Wage moderation was much more needed in Spain following a pre-crisis hike in wages. Stronger improvement in productivity, coupled with wage moderation, has resulted in a more marked increase in competitiveness in Spain. 

    Employment: more dramatic adjustment in all sectors in Spain, notably in construction
  • Associative topics : Economics | Europe | Italy

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