extent of its underground and illegal economy and tax evasion, which translates into an excessive tax burden for those who always play by the rules. the resulting injustices and profound distortionary effects reverberate on the economy ’ s ability to grow and firms ’ capacity to innovate ; they generate rents that damage the efficiency of the productive system. a comprehensive rethinking of the tax system that also takes account of the changes in the social welfare system must adopt the objective of reducing the tax levy on the factors of production. • the sustainability of the public debt is not in doubt, but its high ratio to gdp is being maintained by the low growth potential of the country and is, at the same time, an obstacle to economic growth. economic growth and prudent fiscal policies to encourage investment should, instead, reinforce each other, in a virtuous circle that our country is capable of activating, favouring a reduction in the burden of debt servicing costs. • italy ’ s difficulties are amplified in the south of italy. first and foremost the business environment needs to improve in the southern regions, above all as regards guaranteeing legality. the technology gap is even greater, public policies are less effective : 75 per cent of unfinished works are located in these regions, of which only 30 per cent are public works. the south of italy is fast becoming poorer, in part owing to the emigration of its youngest and most highly - educated people to the centre and north of the country. it is a trend that has immediate social costs and negatively impacts growth prospects. • there have been numerous attempts to deal with ‘ the southern question ’ over the years, with interventions that have been as differently structured as the results have been disappointing. the development of the south is essential to the development of the country : about one third of the italian population lives in the southern regions, producing almost a quarter of italy ’ s gdp. measures to support growth in the regions that are lagging behind must not distort the incentives for firms and workers, preventing the employment of the most productive resources. it is necessary to act on the factors underlying the delays – it is not enough to try to compensate for them with monetary transfers. the effects on the southern economy of efforts to reform the public administration, schools and infrastructure can be extremely significant. * * * • lastly, allow me to express my most sincere wish that these national consultations may conclude with concrete actions that allow us to take the steps forward that the

. ‒ second, there is uncertainty about the ability of the support measures adopted in the various countries to influence household confidence and consumption as well as firms ’ expectations and investment. in other words, it is very difficult to foresee in this situation what resources will be required, how they will be employed, and how effective they will be. ‒ finally, at a deeper level, we do not know how and how much this pandemic will end up shaping our behaviour, consumption patterns, and the allocation of potentially higher precautionary savings. we ask ourselves what new needs will emerge and what social mores will be definitively left behind. and we wonder about the possible consequences for how our society and productive activity is organized. it is very difficult to predict what shape these ‘ new equilibria ’ will take or what ‘ new normal ’ awaits us. • however, this heightened uncertainty must not become an excuse for inertia. it is, on the contrary, another reason to act immediately to strengthen our economy and to press on with a comprehensive package of reforms whose course, for the most part, has already been charted. two weeks ago, in the concluding remarks that accompanied the publication of the bank of italy ’ s annual report, i recalled the words uttered by john maynard keynes 80 years ago, when he suggested ways of countering the economic difficulties of a great war. in a nutshell, keynes ’ s idea was that the best short - term strategy was to come up with a good plan for the medium - to - long term ( the same keynes who to those suggesting that natural market forces should be left to run their course famously responded ‘ in the long run, we are all dead ’ ). • only time will reveal the results of this endeavour, but a comprehensive plan makes the path ahead clearer, shapes expectations positively, and bolsters confidence. the impulse for reform can draw on a number of strengths that characterize our economy, which notwithstanding the last few difficult years have become increasingly apparent and which it is well to recall. despite the delays and difficulties in many areas of the country, in recent months the network infrastructures have held up, enabling millions of workers and students to continue to work and study remotely during the most acute phase of the emergency. the manufacturing sector is flexible and, already since the sovereign debt crisis of 2011 - 12 has rapidly recovered competitiveness, bringing the balance of payments into surplus. italy ’ s net external debt is practically nil.