Eurostat’s figures offer a hilarious – were it not so tragic – insight into the state of our economy: in 2025, real productivity per hour worked in Italy fell by 0.6 per cent year-on-year. Whilst we happily lag behind, the European Union average posted a +1.1% increase, driven by surges in Poland (+4.1%) and Ireland’s usual, unattainable feat (+10.5%). On the continent’s economic map, Europe is coloured a reassuring shade of green, signifying growth, leaving Italy to stand out as an isolated and conspicuous ‘red spot’.
In effect, it is the only major economy on the continent that has managed to produce less value in the same amount of time.

After all, productivity isn’t some abstract concept invented by sadistic professors to help students pass a university exam. It’s simply a measure of how much wealth a system manages to squeeze out of every single hour of work.

When this figure falls, it simply means we are working harder to achieve less.

In the medium term, this charming dynamic translates into real wages that seem frozen in the Ice Age, corporate profit margins reduced to a mere glimmer, and companies losing ground to foreign competitors. If the engine is sputtering whilst others are shifting into a higher gear, the outcome of the race is pretty much a foregone conclusion.

A structural problem: an analysis net of shocks (2007–2019)

The staunch defenders of our economic model will immediately point the finger at the recent biblical plagues: the pandemic, global geopolitical crises, and inflationary spikes. It is a pity that, when looking at the historical data for the ‘calm’ period between 2007 and 2019, this narrative of misfortune falls apart completely. Whilst the rest of Europe used those twelve years to digitise factories, modernise processes and reorganise businesses, Italy’s productivity curve remained dramatically flat. A perfectly horizontal line reminiscent of the flat EEG of a patient in a vigil coma. Our problem is not the result of recent global crises: it has deep roots; it is inherent. We are not unlucky; we have simply been stagnant for twenty years.

The institutionalisation of delay

But the true masterpiece of our bureaucracy lies not in the figures, but in its response times. Back in 2016, the Council of the European Union, concerned about internal disparities, issued a formal recommendation calling on each Member State to set up a ‘National Productivity Committee’. A sensible idea: an independent body to monitor the data and identify where the system is breaking down.

Whilst European partners transposed the directive within a few months, in Rome the file must have ended up in some office tucked away under the stairs, just like in the film *Fantozzi*. The Italian response arrived, with its proverbial institutional calm, only in 2024, with the formal establishment of the Committee within the CNEL.
It took us a mere eight years to set up an observatory to tackle our main economic problem. Not bad at all, really.

The paradox of easy solutions: the minimum wage and the short working week

In a country gripped by this structural paralysis, what do people prefer to discuss on talk shows? Magic solutions, of course. The mainstays of political debate have become the minimum wage set by decree and the four-day working week with no reduction in pay. Two splendid panaceas whoseonly flaw is that they completely turn economic logic on its head.

It is not the four-day working week that boosts productivity as a matter of course; it is a highly productive economy which, because it can afford to do so, affords workers the luxury of working fewer hours. How is a company that already struggles to generate value for every hour paid supposed to survive by working fewer hours or paying more by decree? Introducing these legal obligations, whilst ignoring the dire state of company balance sheets, is simply like ordering a car with no petrol to drive faster. Politicians often resort to the classic line: ‘But other European countries do it!’. True, but they do so starting from levels of efficiency that we have ceased to dream of since the introduction of the euro.

Let’s be clear: increasing productivity does not mean driving employees to the point of exhaustion by making them run up and down the corridors or asking them to work gruelling shifts. It means the exact opposite: enabling them to work more effectively, using advanced technologies, modern software and streamlined processes to generate more value in the same amount of time.

The real industrial levers against propaganda

If we were to take this seriously, the state’s role should be that of a facilitator, not that of a interventionist arbiter that sets wages by law. But genuine macroeconomic reforms require gradual steps, planning and, above all, are terribly tedious to explain in a tweet or to trumpet in front of a camera.

The first real priority would be to tackle the ‘small is beautiful’ mentality – that Italian industrial dwarfism which condemns our micro-enterprises to never having the funds needed to carry out research, purchase advanced software or hire competent managers. A fiscal shock would be needed to force – or at the very least encourage – mergers, consolidations and network agreements.

Secondly, taxes on production bonuses linked to second-level company-level collective bargaining should be abolished. If you want wages to rise, you must leave the money exactly where the wealth is created, rewarding the efficiency of individual companies rather than imposing centralised pay scales like a Soviet ministry.

Finally, the State should grant full tax relief on profits that entrepreneurs choose not to pocket, but to reinvest in state-of-the-art machinery and staff training. This would constitute an industrial policy. However, it requires a step-by-step approach, a long-term perspective and a level of maturity that is incompatible with the pressure to perform ahead of the next election.

The curse of ‘Italy’s oil’

This status quo is further cemented by the great, comforting national myth: tourism, touted as ‘Italy’s oil’. A fairy tale peddled across all media channels, offering a perfect psychological escape route from having to face industrial decline.

Let’s be clear: hotels and restaurants are a wonderful asset, but to think that one of Europe’s largest economies can be sustained on the basis of the hospitality industry and beaches is a basic mathematical error. Mass tourism, by its very nature, generates a structurally low level of added value per hour worked. It is a fragmented, seasonal sector where technological intensity is minimal and wages are inevitably low. Replacing metalworking factories or the chemical industry with cocktails on the beach is not a development strategy: it is a conscious choice to turn ourselves into the continent’s playground, thereby cementing the stagnation of our incomes for ever.

The craving for approval versus the reality of the figures

Telling the public the truth, unfortunately, does not pay off in terms of viewing figures. Promising a shorter working week or a minimum wage with the stroke of a pen is undoubtedly easier; it appeals to the nation’s gut feelings and creates the illusion that the state can create prosperity out of thin air, without any effort. The reality of the real economy, however, still follows a basic formula that allows for no exceptions: Productivity = wage increases

Whilst we continue to prefer the fantasy of talk shows to the harsh reality of the figures, the Draghi Report on competitiveness has reminded Europe that the entire continent risks decline unless it steps up its efforts in efficiency and innovation. Against this backdrop, Italy risks remaining the Cinderella of the bloc, stuck in the red on the Eurostat map. If those in power wish to avoid the permanent downgrading of the country’s economy, they will have to do the hardest thing of all: switch off the cameras, shelve the propaganda and start doing the maths with a calculator in hand.