Independent Strategy

Italy: Renzi – starting to impress

Italy’s economic track record has been pretty woeful in recent years. The economy has been dogged by high and rising sovereign debt, a stagnant labour market, which seems to have all but abandoned younger workers, and terrible productivity. This drove trend growth rates down to zero. Politics was in an equally sticky quagmire and really the key obstacle to addressing all of the above. But things are changing under the leadership of PM Matteo Renzi. His embrace of political and economic reform is meaningful. In fact, the early legislative changes look more forceful than markets are giving credit for. We remain long Eurozone equities, with a preference for Italy among the peripherals. Within Italy we would focus exposure on manufacturers and export orientated SMEs.

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