(Bloomberg) -- Italy’s South needs investments that can help boost the area’s economy in a lasting way, Bank of Italy Governor Fabio Panetta said.
“There’s a need to privilege intervention in infrastructure that can increase productive growth,” Panetta said in Sicily on Thursday. This includes investing in the water distribution network, the electric grid, roads, railways, ports and airports, he said.
Italy’s southern regions are historically less wealthy and dynamic than the rest of the country. It’s home to only a third of the country’s population and produces just one-fifth of gross domestic product, according to Bank of Italy calculations. However, the area saw stronger growth after the pandemic, with local output, employment and exports all growing faster than in the North, Panetta said.
The South is also the biggest recipient of European Union Recovery Fund cash, with 40% of Italy’s over €190 billion ($212 billion) cut of financing slated to go its way. This boon is helping to push recovery and improving infrastructure across the region.
Panetta said the challenge now will be to make sure the money is used wisely and not invested hastily in projects that won’t bear fruit in the future. He also mentioned the need to improve the efficiency of public administration, to encourage greater legality and generally create an environment that encourages young people to live and work in the South.
“The exodus of young southerners toward other parts of the country, or abroad, is not just motivated by a search for better job opportunities, but also reflects a widespread perception of a context where they are not able to fully realize their talents,” he said.
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