Millions Falling Into Poverty As Italy Endures Recession and Soaring Unemployment

Almost 15 million people, or a quarter of the population, in Italy were living in some form of economic hardship at the end of 2012, as the eurozone’s third largest economy endures one of its longest recessions amid soaring unemployment and drastic spending cuts.

The recession that has lasted almost two years has taken a toll on ordinary Italians who are increasingly digging into their savings to make ends meet, said Italy’s national statistic agency ISTAT in its annual State of the Nation report.

Almost 15 million people, or a quarter of the population, in Italy were living in some form of economic hardship at the end of 2012, as the eurozone’s third largest economy endures one of its longest recessions amid soaring unemployment and drastic spending cuts.

The recession that has lasted almost two years has taken a toll on ordinary Italians who are increasingly digging into their savings to make ends meet, said Italy’s national statistic agency ISTAT in its annual State of the Nation report.

ISTAT found that 14.3 percent of the population, or 8.6 million people, were “seriously deprived” in 2012, up from 6.9 percent in 2010.

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Nine poverty indicators were taken into account while carrying out the study; if a family meets more than four, it is considered to be seriously deprived. Some 15 million people – 25 percent of Italy’s population – are living in families that meet three or more of the poverty indicators, the research found.

The report also found that nearly two-thirds of Italians attempted to reduce their food spending in 2012, with a rising proportion (16.6 percent) of households unable to afford a protein-based meal, such as meat, every two days. In 2010, only 6.7 percent of Italians went without meat.

In addition, ISTAT said the gap between Italy’s wealthier North and impoverished South became more pronounced in 2012, with one in five Southern Italians living in poverty.

The Italian economy shrunk by 2.4 percent in 2012, a decline ISTAT attributed to a fall in consumer spending.

Nicholas Spiro, head of Spiro Sovereign Strategy, told CNBC that ISTAT’s report made for “grim reading”.

“It is a reminder, if one were needed, of the severity and scale of Italy’s recession, the longest since the Second World War. Italy may be the comeback kid of the global sovereign debt markets, but its economy does not look as though it will ever come back – and it was not even strong to start.”

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The agency predicts Italy will contract 1.4 percent this year before returning to 0.7 percent growth in 2014. Earlier this month, the Organisation for Economic Cooperation and Development said Italy’s GDP is expected to shrink 1.5 percent this year before expanding 0.5 percent in 2014.

This week, international charity organisation Save the Children warned that more than 700,000 children across Italy are living in absolute poverty, lacking proper nutrition, health care and in some cases, education.

Italy is mired in its fourth recession since 2001 and the tax increases and budget cuts imposed by former Prime Minister Mario Monti’s caretaker government have been blamed for pushing unemployment to 11.5 percent, the highest in more than 13 years.

According to ISTAT, just 58 percent of young people who graduated within the last three years are employed, well below the EU average of 77 percent.

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