The year 2025 closed with a narrative that dominated the national media: Italy is growing more than Germany, the spread is at its lowest and the stock market is breaking records.
However, for a country that has held the record for the lowest growth in the world for thirty years, to stop at the surface of decimals is to ignore the structural nature of our decline.
If we want to ‘tell the whole story’, we need to analyse what lies behind these indicators and ask ourselves whether this stability is the result of our own merits or of external contingencies that could fade away quickly.

The ‘zero point war’: the real numbers of growth

Despite the euphoria, the numbers speak for themselves. In 2025, the Italian economy grew by 0.7%-0.8%, a numerically superior performance to the 0.2% recorded by a Germany in the midst of an industrial identity crisis. However, this figure remains systematically below the eurozone average (1.2%) and drastically off the pace of similar partners in terms of structure, such as Spain (2.1%).

This growth, although higher than initially forecast, remains confined to ‘zero point’ territory: it is a growth of resilience, not expansion.
Italy’s GDP is struggling to recover to pre-pandemic levels in real terms, but it is doing so with short breath. The fundamental fact is that Italy remains mired in extensive growth, based more on the volume of services and tourism than on the quality and innovation of industrial production.

The PNRR: the artificial lung of the economy

If Italy has not slipped into recession over the past year, much of the credit must be given to the National Recovery and Resilience Plan (NRP). In 2025, expenditure related to the Plan reached its critical peak, injecting resources into the system that acted as a veritable artificial lung.

Without the multiplier effect of European funds, Italian growth in 2025 would have been flat or negative.
Public investment has supported the infrastructure sector, compensating for the abrupt halt to building bonuses. However, the horizon of June 2026 – the Plan’s expiry date – represents a real cliff edge that politics seems to be ignoring. The question is: what will happen when this cash flow stops? If these billions have not generated a structural increase in productivity, Italy will end up with a higher debt and an economic engine shut down again.

The spread: the market’s optical illusion

A favourite topic to celebrate national stability is the BTP-Bund spread, which has stabilised below 70 basis points. To understand whether this is really a premium on Italian management, one must remember that the spread is a difference.

Over the past year, the yield on the 10-year German Bund has risen sharply (by about 20%). Germany is facing an unprecedented structural crisis: the end of cheap Russian energy and export difficulties. Consequently, the markets demanded higher yields for Berlin bonds. During the same period, the yield on our BTP remained essentially static (around 0%). If the benchmark rises and ours remains stable, the spread closes. This is a very good sign because it means that interest on our public debt is not rising, but it is a relative stability, also dictated by the difficulties of others.

Italian stock exchange: banks and monopolies

Likewise, the records of Piazza Affari should be read with intellectual honesty. The Milanese list is heavily skewed towards two sectors:

• The banking sector accounted for about one third of the basket. Banks made resounding profits thanks to the differential between (high) loan rates and (low) deposit rates.
• The energy giants, companies that often operate under near-monopoly conditions.

The stock market flies because those who manage capital and essential services extract value from the system, not necessarily because manufacturing companies are innovating or growing. A stock market that runs while the real economy struggles is a symptom of a rent economy.

The wage drama and the bargaining trap

Here the brutal link between macroeconomics and real life emerges: when a country does not grow, wages cannot grow. The 30-year stagnation has created a glass ceiling. The Parliamentary Budget Office (UPB) confirms that, despite falling inflation, real wages will remain lower in 2025-2026 than in 2021.

In a country where productivity has been at a standstill for decades, there is no room for wage increases other than simple and partial inflationary recoveries. To break out of this stalemate, we need the courage to unhinge a centralised contractual system that today appears anachronistic and punitive.

Public debt: the need for courageous cuts

If bargaining reform is the driving force for the private sector, the management of public debt remains the boulder blocking the state. We can no longer afford to consider debt as an independent variable. With a debt approaching 140% of GDP, every fluctuation in rates takes billions away from health, education and tax cuts.

It is time for bold proposals on public spending. No longer are cosmetic spending reviews that cut a few million without making a dent in structural inefficiencies sufficient. It is necessary:

• Selective but profound cuts: take action on unproductive public participations and on market-distorting windfall subsidies.
• State efficiency: reduce current expenditure to free up resources to reduce the tax burden on businesses and workers.
• European credibility: only by actively reducing its debt can Italy stop being the special watchdog of Brussels and Frankfurt and recover sovereignty over its economic choices.

Conclusion

The Italy of 2026 enjoys an apparent calm. Spread stability and stock market records are breaths of fresh air, not the cure. The cure remains real growth through contract reform and a drastic cut in public debt.
Without these measures, at the end of the NRP, Italy runs the risk of discovering that doing better than Germany was just a statistical illusion, in a continent that in the meantime has started running again without us.