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Se l’Italia fosse un’azienda: la due diligence di Carlo Cottarelli

·34 min·2 clips

Carlo Cottarelli reveals the five key reasons Spain is growing faster than Italy, starting with a 6% lower tax rate.

1. This Inside Finance podcast episode features Carlo Cottarelli, former IMF fiscal affairs director, interviewed by Marco Mizzau using the metaphor of Italy as a company undergoing strategic due diligence. 2. Cottarelli's most recent book is 'Senza giri di parole: la verità sulle sfide economiche e sociali del nostro futuro' (Mondadori 2025); he also wrote 'Dentro il palazzo' (Mondadori 2024) and 'Chimere' (Mondadori 2023). 3. The episode's core question is: if a global private equity fund were evaluating Italy as an investment, where would the due diligence start — and would the fund ultimately invest? 4. Cottarelli opens by acknowledging Italy's genuine improvement in perceived macroeconomic stability: its 135-136% debt-to-GDP ratio is considered to be on a declining path, unlike France's, which is expected to grow automatically under current policies. 5. He frames fiscal stability as a necessary but insufficient condition — what actually attracts investment is ease of doing business, and Spain is his benchmark, having grown at 3.5% of GDP in the prior year versus Italy's 0.7%. 6. Cottarelli enumerates five concrete advantages Spain holds: a tax-to-GDP ratio roughly 6 percentage points lower than Italy's approximately 43%; simpler bureaucracy; civil trials reaching final judgment in 3 years versus Italy's 5-5.5 years; lower energy costs from maintaining nuclear power alongside renewables; and a regular migration flow that keeps the working-age population growing despite a fertility rate of 1.1 — even lower than Italy's 1.2. 7. On demographics, Cottarelli traces Italy's decline to the end of the 1960s when the average number of children per couple fell from 2.4 to 1.4 within 15 years; he estimates demographic factors explain 20-40% of Italy's productivity growth decline, based on economic modelling specific to Italy's parameters. 8. He attributes additional decline to the mismanagement of Italy's euro transition: between 1999 and 2009, Italy's export volumes grew 0% while Germany's grew more than 70%, due to maintaining higher inflation and production cost growth than Germany without the devaluation option. 9. This cost-competitiveness deterioration, combined with worsening public accounts (the primary surplus fell from approximately +4% of GDP at the end of the 1990s to 0% within five or six years), made Italy a target for speculative attacks in 2011-2012, with lasting damage to investment and growth. 10. On the debt-reduction path, Cottarelli presents a scenario: Italy at 135% debt/GDP with a 3.5% deficit — if growth rises from 1% to 2% and all additional tax revenues are saved, the debt/GDP ratio falls by nearly 60 percentage points in 15 years without spending cuts. 11. He argues bond markets are forward-looking: as long as debt/GDP is visibly declining, Italy is rewarded in borrowing costs — which already distinguishes it from France — but the trajectory would improve dramatically with even 0.5-1% more growth per year. 12. On political will, Cottarelli draws a comparison to Argentina's Milei, who sought an explicit popular mandate for reform and cut public spending by one-third in one year; he argues Italy's politicians cannot make comparable cuts without a similar mandate. 13. He predicts the next national elections in approximately two years will be the test: whether any candidate asks voters for a mandate to cut spending and lower taxes, and whether Italians grant it. 14. On meritocracy, Cottarelli says Italy lacks a culture of merit: the perception that high earners are 'lucky' rather than skilled is widespread, and this makes it politically difficult to reform public administration hiring and performance measurement. 15. He notes that Minister Zangrillo proposed a potentially revolutionary law on merit in public administration, but that it has not received the sustained political investment from the Prime Minister's office needed to become real reform. 16. On private equity, Cottarelli is not alarmed by foreign acquisition of Italian companies per se, but notes it is partly a symptom of demographic collapse — entrepreneurs with few or unwilling heirs sell to international buyers, which is a structural rather than merely financial problem. 17. On Italy's innovation and startup ecosystem, he notes Europe has only one unicorn (Spotify) and advises Italian entrepreneurs not simply to stay or go but to pressure the government to create conditions under which staying makes sense. 18. The most recent Italian government budget for the first time projected growth below 1% over the next three years — which Cottarelli cites as a telling signal of the structural state of the economy. 19. The interview is conducted in a direct, crisp style with Mizzau asking short focused questions and Cottarelli giving structured multi-point answers with specific data; the language is Italian with some English passages. 20. The episode is best suited for Italian business and finance professionals, policy-interested listeners, and anyone evaluating Italy as an investment destination or interested in European comparative political economy.

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