Why Italy was / is (and will be) suffering the crisis more than the rest of Europe

In last period, the attention of italian politicians and journalists/experts have been focusing on the concept of "growth" as a fundamental response to this crisis.


After Berlusconi's and Monti's financial laws to put in safe the Italian debt and accounting, taxes have been raising to the highest level in Europe. VAT increased from 20% to 21%, and will increase to 23% in 2012-2013, taxes on home property have been replaced, and so on... 


Some institutions have calculated that an average family will have an increase of tax expenditures of more than a thousand of Euros for 2012. 


Now, politicians and journalists said that we need to focus on "growth", the phase 2 of the Italian (and European) Economy's revitalization. A new law is trying to liberalize some markets as: pharmacies, taxis, lawyers, notaries and so on. 


All the measures that will be applied with the new law for sure will have a positive impact on the internal economy and on the profit/surplus redistribution. 
Basically, to use the street man words, companies and some categories will have less and consumers (hopefully) will have more in their pocket.


But, if we think back about our lessons on macroeconomy we should remember that a profit/surplus redistribution does not affect the "growth" of a nation's economy. 
In fact, if we clean out from the dust the GDP equation we will find that:

Y = C + I + G + X

where

Y = GDP

C = consumers spending

I = capital expenditures / investiments

G = public/government spending

X = net exports given by = E - Z

where

E = exports

Z = imports

Now, during an economic crisis, where individuals and organizations are more wise on expenditures and where the growth is quite close to the ZERO, it is obvious even to a freshman that Y cannot grow if you only move profit/surplus from a category to another, the sum (of the change) still will be ZERO.

But, in that equation there is an X, a letter that in Italy is always forgotten by politicians and journalists. The easiest way to grow is to increment the exports.

But even if this seems obvious to everyone, we still don't know why every Italian government (even the last one who is formed by outstanding economists) have not taken any measure to favor the exports.

In fact, Italian multinationals confirmed their position as the companies with the lowest share of non-domestic sales, stated a research of R&S on world's multinational companies financial statements that took into account the last 10 years. 

Even if Italy is part of the Europe, which is the most globalized continent for non-domestic sales. 

During the last 10 years Italian multinationals grew their non-domestic sales of 9%, but they are still at the lowest level in Europe.

This situation seems to be a weakness of the Italian economy, but, as a management scholar, I would say that this is a great opportunity too!

So, dear Professor Monti, dear Italian politicians, pleas take into consideration the idea to favor those businesses that export! 

Let take measure to push Italian exports and we will grow!