The Economic and Financial Document (EFD) 2014 for Italy describes a country which does not grow and will hardly grow even in the near future. The document announces a programme of structural reforms in the labour market and for competitiveness which will generate marginal impacts on domestic demand; at the same time, it foresees an over-optimistic growth for export and private investments although it does not say how it will be realized, given (in a context of measures devoted to respect) the constraints of balanced budget and fiscal consolidation. The recipe for the next few years adopted in the Italian EFD 2014, recommended by the European Commission, is a perverse mix of "expansionary austerity" and "expansionary precariousness" which leaves no room for employment recovery and wage growth. What we need instead is a policy anchored on two pillars. On one hand, an economic policy supporting domestic demand supporting public demand to serve industrial policy for innovation. On the other, a labour policy for innovation at the shop floor level to link productivity and wages with pay for participation schemes, and to trigger cooperative behaviour within firms among trade unions, workers, management, and owners.
Keywords: Economic Growth, Wage Wedge, Jobs Act, Industrial and Innovation Policy
Jel Code: E61, J08, J38, O47