The European Union's demographic
decline risks having "negative effects on the state of pension
systems, on the healthcare system, on the propensity to do
business and innovate, on the sustainability of public debt",
Bank of Italy Governor Fabio Panetta said on Wednesday.
In order to counter this phenomenon, "it is essential to boost
human capital and increase the employment of the young and
women", including through "measures favouring the arrival of
regular foreign workers who constitute a rational response on an
economic level, regardless of evaluations of a different
nature", he added, addressing the Rimini Meeting.
This will "need to be managed in a coordinated manner within the
Union", taking into account social stability and boosting the
integration of foreign citizens.
The Bank of Italy governor went on to say that "Italy is the
only country in the euro area" in which public spending due to
interests on the national debt is "approximately equivalent to
that on education", which shows how "high debt is weighing on
the future of young generations, limiting their opportunities".
Panetta also told the Rimini event organized by members of the
Catholic activist group Comunione e Liberazione (Communion and
Liberation, CL) that the European project "is now confronted
with internal and external challenges" that test its "solidity
and cohesion", in front of which European governments have the
role of "not losing the EU's commitment towards integration and
to continue the common path".
Panetta added in his speech, which was mainly devoted to
European integration, that "without a common market, per capita
income in Europe today would be under one-fifth".
The idea that the euro area can work effectively without a
central fiscal capacity is "simply an illusion and must be
overcome" with a common fiscal policy, said Panetta.
A test for the new European legislature "will be the ability to
confirm the use of common expenditure projects and to progress
towards a more complete and more integrated union on both a
financial and fiscal level", starting with a "reflection on the
next steps" once the program NextGeneration EU expires in 2026,
concluded the governor.
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