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In the area of public finances, restraints on healthcare spending and the public wage bill introduced since 2011 have helped to contain public expenditure over time. In 2012, a pension reform, now partly reverted (see Section 4.1), helped to improve long-term debt sustainability, while maintaining the adequacy of pensions. Some privatisations contributed to a slight reduction of public debt. Important taxation reforms have been taken since 2011, albeit sometimes inconsistently. For instance, the tax on immovable property was increased in 2011, but partly repealed in 2015. Measures to reduce the tax burden on labour were taken in 2014 and 2015, partly financed by shifting taxation to consumption. In 2014, important tax simplification measures were undertaken.

In civil justice, a major reorganisation of civil courts was completed in 2013, and several measures were introduced to reform civil procedures, strengthen out-of-court settlement and reduce abusive litigation. A comprehensive anti-corruption law was adopted in 2012 to step up the fight against corruption. The law established an anticorruption agency, which was reinforced in 2014, but still lacks adequate resources. A crucial reform of the statute of limitations has been repeatedly delayed. In public administration, measures to improve staff mobility and promote digital technology were introduced in 2014.

In the banking sector, several corporate governance reforms have been adopted since early 2015 and are now implemented. Measures were also taken to help banks dispose of their impaired loans. These measures (e.g. a more favourable tax treatment of loan loss provisioning, insolvency and collateral enforcement reforms and an impaired loan securitisation mechanism benefitting from state guarantees) are aimed mainly at supporting

the development of a private secondary market for distressed assets in Italy. Finally, since 2012, the authorities have passed several measures to support and diversify firms’ access to finance, notably through an allowance for corporate equity (now partially reversed), mini-bonds and the central guarantee fund for small- and medium-sized enterprises.

A wide-ranging reform of the labour market (‘Jobs Act’) was initiated at the end of 2014. Inter alia, the reform reduced the cost and the uncertainty related to individual dismissals and rationalised contractual forms and passive policies. It also foresaw a reform of active labour market policies, which is now being implemented. The 2014 reform built on and followed the lines of a previous labour market reform undertaken in 2012. A reform of the collective bargaining framework has long been discussed, and social partners signed important agreements on the representativeness of trade unions in 2014. However, progress has been limited to date, while new sector-by-sector agreements are being reached. The 2012 pension reform increased the labour market participation of the elderly. However, the recent backtracking on it reinforces the unbalanced composition of social expenditure in favour of pensions (see Section 4.3.2). An important education reform was undertaken in 2015 (‘La Buona Scuola’) and is now being implemented. To alleviate poverty risks, several experimental measures have been introduced since 2012.

In-depth market opening measures for regulated professions and some measures for the retail sector were introduced in 2012. Since 2011, several packages have been adopted to reduce the administrative burden for companies and citizens.

Overall, Italy made some progress in addressing the 2016 country-specific recommendations. (¹³) Substantial progress was made in reforming the budgetary process. Some progress was made with regard to civil justice, labour market and the banking sector. Conversely, progress was limited on taxation, competition and public administration, and no progress was made in reforming the statute of limitations.

Table 2.1: Summary table on 2016 CSR assessment

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