ITALY has made an incredible effort to speed up long overdue economic reforms which have been courageous, ambitious and wide ranging to maintain the momentum.

Staunch implementation and continuation of the reforms are crucial, OECD Secretary-General Angel Gurría said at a joint OECD-Italian government conference in Rome. The success of Italy in overcoming these challenges will be critical not only for the Italian people but for Europe as a whole.

The Italian government has already approved the reforms and OECD expects that reforms will boost growth and raise the GDP of the country by up to 4% over next 10 years.

Over the recent years Italy's labour productivity has been weakest among OECD countries. Low productivity growth has escalated unit labour costs which has led to competitive disadvantage for Italy and fuelled its current account deficit.

Improving Italian competitiveness requires action on three fronts: increasing productivity; keeping wage dynamics in tandem with productivity growth; and alleviating the tax burden on labour income – provided that this is done in a fiscally neutral manner.