Italian economy shrinks in 2nd quarter - Gayo Lues

Official government statistics agency, ISTAT, said on Tuesday that activity fell in all sectors of industry, services and agriculture.

Italy’s government is implementing a series of austerity measures worth 20 billion euros as it tries to reduce the country’s debt through spending cuts and tax increases that are hurting businesses and households.

The poor figures will spark greater concern over whether Premier Mario Monti can bring Italy back from the debt crisis as his policies contributed to deepening the country’s fourth recession since 2001.

Italy, the eurozone‘s third largest economy, also saw unemployment rise in June to a new record high of 10.8 percent, the highest in almost 13 years, ISTAT reported last week.

The continued recession is gloomy news for Italians, who have seen a series of austerity packages, tax hikes and pension charges as they struggle to battle off the debt crisis.

Italians have been staging demonstrations to protest against high unemployment, economic adversity, and the hardship occasioned by the government-introduced labor reforms.

Apart from Italy, various eurozone member states, including Greece and Spain, have been struggling with deep economic woes since the bloc’s financial crisis began roughly five years ago.

MR/PG/JR/AZ