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EMPLOYMENT

Could the pandemic reverse the ‘brain drain’ in southern Italy?

There are hopes that southern Italy could experience an economic revival amid the pandemic, as up to 100,000 workers have moved south - many of them to return home.

Could the pandemic reverse the 'brain drain' in southern Italy?
Corrado Paterno Castello, one of the two founding members of food startup BoniViri, on April 28, 2021 in Catania. Photo: Andreas Solaro/AFP

Sipping a craft beer on a warm spring evening in Catania, Sicily, Corrado Paterno Castello spares a thought for friends and colleagues he left behind in Milan, 1,000 kilometres (600 miles) north.

“Today, between meetings, I had a swim at the beach,” the 29-year-old entrepreneur told AFP, with a beaming smile. “The quality of life you have here is very different from what you experience up north, and it is priceless.”

Workers across the world have taken advantage of enforced home-working during the coronavirus pandemic to move to warmer climes, requiring only a plug for their laptop and a decent internet connection.

READ ALSO: Could Italy’s abandoned villages be revived after the coronavirus outbreak?

But in Italy, where for generations those from the relatively poorer south have sought work in the north, it has been a chance for people like Paterno Castello to go home — perhaps for good.

‘Free to return’

Italy has an old history of regional disparities, driving internal migration from rural or underdeveloped areas, mostly in the south, to wealthier urban centres in the north like Milan, a business, fashion and finance hub.

“Out of my high school class, nearly everybody left … at least 15 out of 20 people,” said Elena Militello, a PhD student from Palermo.

“But now some have come back, there’s a group of three that has returned to Sicily and found work.”

Restructuring work at the “Isola Catania” co-working space in Catania. Photo: ANDREAS SOLARO / AFP

The 28-year-old came back in 2020 after spending years in Milan, the United States, Germany and Luxembourg, and is now actively campaigning for more people to follow in her footsteps.

She is one of the founders of the South Working association, which acts as a think tank, advocacy group and support network for anyone considering a move down south. It has around 10,000 followers on Facebook.

On its website, the association calls itself a community of “young professionals, managers, entrepreneurs and scholars, mostly born in southern Italy” who left to pursue their ambitions.

“Today, our common desire is to be able and free to go back home,” they say.

Svimez, a research institute, said in December that as many as 100,000 workers went south during the pandemic, adding that it was a historic opportunity to reverse the brain drain that has plagued the Italian south.

‘Enormous potential’

Before the pandemic struck, Milan was seen as Italy’s most dynamic and successful city.

But the south has many advantages, from cheaper living costs to less traffic and pollution — and the weather. In Catania, average temperatures do
not fall below 10 degrees Celsius (50 Fahrenheit), even in mid-winter.

Mariano Corso, a leadership and innovation professor at the School of Management of Milan’s Polytechnic University, said the so-called south working phenomenon could benefit all of Italy.

A healthy “competition between territories” should drive up public services everywhere, and “for southern cities this is a huge opportunity to seize the
moment … and get back in the game,” he said.

Public transport and internet can be a problem across the south, including in Sicily, but Militello’s association is lobbying for better service.

READ ALSO: Digital divide – The parts of Italy still waiting for fast wifi

It is also teaming up with private investors developing co-working spaces for south workers.

One is due to open next month in Palazzo Biscari, a grandiose 18th century palace in downtown Catania once used as a set for a Coldplay music video.

“I can see dozens of companies and hundreds of people working here,” Antonio Perdichizzi, founder of the Isola Catania co-working space, told AFP as workers and decorators raced around him in brightly coloured rooms.

“There is enormous potential in having young and older people who have worked in Italy and Europe or in other parts of the world and who are coming back home due to the pandemic.”

A new buzz

Jobs in Sicily are still hard to come by — unemployment in 2020 was 18 percent, double the national average — but growing numbers of people moving there while working online for northern firms is creating its own buzz.

READ ALSO: Fast trains and extended building bonus: How Italy’s EU recovery plan could affect you

After studying and working in Milan, Paris and Tunisia, Paterno Castello returned to Catania last year for home-working. While there, he reunited with a high school friend to launch an organic food start-up called Boniviri.

While admitting the cultural and social scene of a city of around 300,000 is no match with Milan’s more cosmopolitan vibe, he describes Catania as “a place where things are happening”.

“A few years ago it wasn’t like this, you needed to go north to make things happen … now there is innovation, culture here as well, there are young people like us who want to bring something new.”

By AFP’s Alvise Armellini

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ECONOMY

How is Denmark’s economy handling inflation and rate rises?

Denmark's economy is now expected to avoid a recession in the coming years, with fewer people losing their jobs than expected, despite high levels of inflation and rising interest rates, The Danish Economic Council has said in a new report.

How is Denmark's economy handling inflation and rate rises?

The council, led by four university economics professors commonly referred to as “the wise men” or vismænd in Denmark, gave a much rosier picture of Denmark’s economy in its spring report, published on Tuesday, than it did in its autumn report last year. 

“We, like many others, are surprised by how employment continues to rise despite inflation and higher interest rates,” the chair or ‘chief wise man’,  Carl-Johan Dalgaard, said in a press release.

“A significant drop in energy prices and a very positive development in exports mean that things have gone better than feared, and as it looks now, the slowdown will therefore be more subdued than we estimated in the autumn.”

In the English summary of its report, the council noted that in the autumn, market expectations were that energy prices would remain at a high level, with “a real concern for energy supply shortages in the winter of 2022/23”.

That the slowdown has been more subdued, it continued was largely due to a significant drop in energy prices compared to the levels seen in late summer 2022, and compared to the market expectations for 2023.  

The council now expects Denmark’s GDP growth to slow to 1 percent in 2023 rather than for the economy to shrink by 0.2 percent, as it predicted in the autumn. 

In 2024, it expects the growth rate to remain the same as in 2003, with another year of 1 percent GDP growth. In its autumn report it expected weaker growth of 0.6 percent in 2024.

What is the outlook for employment? 

In the autumn, the expert group estimated that employment in Denmark would decrease by 100,000 people towards the end of the 2023, with employment in 2024  about 1 percent below the estimated structural level. 

Now, instead, it expects employment will fall by just 50,000 people by 2025.

What does the expert group’s outlook mean for interest rates and government spending? 

Denmark’s finance minister Nikolai Wammen came in for some gentle criticism, with the experts judging that “the 2023 Finance Act, which was adopted in May, should have been tighter”.  The current government’s fiscal policy, it concludes “has not contributed to countering domestic inflationary pressures”. 

The experts expect inflation to stay above 2 percent in 2023 and 2024 and not to fall below 2 percent until 2025. 

If the government decides to follow the council’s advice, the budget in 2024 will have to be at least as tight, if not tighter than that of 2023. 

“Fiscal policy in 2024 should not contribute to increasing demand pressure, rather the opposite,” they write. 

The council also questioned the evidence justifying abolishing the Great Prayer Day holiday, which Denmark’s government has claimed will permanently increase the labour supply by 8,500 full time workers. 

“The council assumes that the abolition of Great Prayer Day will have a short-term positive effect on the labour supply, while there is no evidence of a long-term effect.” 

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