6.1 Economy

Unit 6 Overview

Unit 6 discusses themes related to how complex issues affect people's lives in Italian-speaking communities. It forces individuals to look on the larger scale and analyze issues from a global perspective, wondering how they can positively and negatively affect the world around them and working toward possible solutions that address global challenges. 

Here are some questions to guide your studying:

• How do environmental, political, and societal challenges positively and negatively impact communities?
• What role do individuals play in addressing complex societal issues?
• How do challenging issues affect a society’s culture?

Economy 💲💰 💸 🤑

The economy is the wealth and resources of a country or region, with an emphasis on the production and consumption of goods and services. It is usually measured in monetary terms, which means that the countries with the highest Gross Domestic Products and Gross National Products (USA, China, Japan) have developed into economic superpowers, while other nations with less productivity are still underdeveloped and suffering from low standards of living.

Economy Overview - Italy 

Italy is the world's 9th biggest economy, primarily focusing on services (provides services/help to other people but does not produce anything), which accounts for 75% of the country's total GDP and employs over 65% of the population. Despite the high rates of industrialization, Italy still suffers from political instability and economic stagnation.

Important Facts:

• Manufacturing specializes in high-quality goods and is run by small and medium enterprises.
• The country is divided, in that the north is highly industrialized, producing 75% of the country's wealth, while the south is less developed and more agriculturally dependent.
• Unemployment is significantly higher in the south.
• The country is slowly building — only grows around 1-2% each year.
• Unemployment has reached highs of nearly 13%, demonstrating the unstable job market and fierce global competition.
• Italy's public finances are in disarray — 5th largest debtor worldwide.

Financial Crisis of 2007-2008 💣 😢

The 2008 financial crisis was the worst economic disaster since the Great Depression. It originated in the United States, as the U.S. housing market failed, but it soon threatened the entire international financial system. Major investment and commercial banks, insurance companies, and savings and loan associations all failed, precipitating an enormous recession. Worldwide, millions of people lost their jobs and homes, businesses declined, and there was a loss of more than $2 trillion in global economic growth.

Effects on Italy: 👎🏽 👎🏽

• After the Lehman Brothers, an investment banking company, went bankrupt, Italy's GDP dropped by ~ 5.5%
• Immediate STOP in private capital inflows, as the high governmental debt became unsustainable
• Merchandise imports have grown less than 1% from 2008-present day
• Unemployment immediately rose to ~8% and reached as high as 13% in 2013- The Youth unemployment rate rose to 28% Since the 2008 financial crisis, Italy has implemented several packages to help people and stimulate economic growth. The country has made enormous strides, but there is still no clear trend of recovery, as the job market remains unstable, unemployment is still high, and Italy's finances are in shambles...

COVID-19 Pandemic of 2020 😷 😷

It is still too early to completely predict the extent of the global economic damage that the coronavirus pandemic will bring, but there is no doubt that it will have severe economic consequences. The virus was first detected in China but has since spread to over 188 countries. Global shares are suffering from large drops, unemployment rates have rapidly increased and several countries run the risk of recession.

Effects on Italy: 👎🏽 👎🏽

• Italy's public debt will reach 160% of its GDP
• GDP will drop up to 18% by June 2021
• Over 3 million workers were laid off from over 178,000 companies
• Italy could enter its fourth recession in a decade
  

Coronavirus Outbreak in Milan, photo courtesy of Business Insider.

Empty restaurant tables in St. Mark's Square, Image Courtesy of World Economic Forum

In response to this crisis, the Italian government has taken many measures to try and alleviate some of the hardships its people and economy are enduring throughout this difficult time. "An emergency income💰 " was given to over 3 million people, city food stores and ordinary people have banded together by giving out free food or playing music in the street, etc., and specific rescue packages have been provided to companies and homeowners. 

Solutions - Global Scale 💡

For the most part, every country takes action on a national scale to address the issues that are most plaguing that specific nation and its people. Countries were forced to rebuild their economies after the financial crisis of 2008, and many are still in the process. There are both similar and different steps that will need to be taken to rebound from the Coronavirus pandemic. Regardless, there is one issue globally that has stood the test of time and is only getting worse: Income Inequality 🤛🏼 🤜🏼 , the divide between the developed and underdeveloped, the core and the periphery, the haves and the have-nots.

Possible Solutions:

• I paesi devono rispettare gli obblighi in materia di diritti umani scritti in trattati internazionali
• Tutte le giovani donne devono avere accesso al sesso e alla salute riproduttiva
• Dare la priorità alle donne nelle famiglie povere
• Offrire una sicurezza del reddito di base universale che copra tutti i servizi essenziali
• Adottare politiche progressiste volte ad accelerare la crescita del reddito tra i più poveri del 40%
• Aumentare la tecnologia che misura tutte le dimensioni della disuguaglianza e come si influenzano a vicenda
• EDUCAZIONE EDUCAZIONE EDUCAZIONE 🏫. 📚

Solutions - Italy 💡

Italy has made massive strides to ensure that it is still one of the most powerful nations in the world. But with every year, new countries surpass Italy as a "global power" and the disastrous economic situation with high unemployment, stagnant growth, poverty levels, and debt continues to be left unsolved.Possible Solutions:

• Riformare il sistema politico in modo che vi siano meno partiti politici e una leadership più stabile
• Abbandonare il sistema euro perché i salari potrebbero diminuire e le esportazioni potrebbero aumentare
• Riparare il sistema bancario 🏦
• Le tasse devono essere riorganizzate e ristrutturate per generare una maggiore crescita economica
• Rendere più difficile sparare opere senza motivi specifici

Strive for Five Vocab 🔑 🔑

• La recessione - recession
• Disoccupato/a - unemployed
• I risparmi - savings
• Il reddito - revenue/income
• La disuguaglianza - inequality
• Il debito - debt
• La crescita/ il declino - growth/decline
• Essere in bancarotta - to be bankrupt
• L'industrializzazione - industrialization
• Fabbricare - to manufacture
• I prodotti - products
• Le aziende/ le imprese - companies/businesses
• I consumatori - consumers