How to Do Business In Italy Research Paper Example | Topics and Well Written Essays - 1250 words

How to Do Business In Italy - Research Paper Example It can be observed that the Italy does not have good international relation with most of the countries . In the recent times, Italy is facing significant challenges in meeting its debt requirements and the consequential harm which has been caused because of euro zone along with the EU which is quite difficult to eradicate . Economy Policy Outlook Italy is considered to be a country with heightened financial as well as economic crisis that weakens its position in the euro zone. This arises essentially from a change in market perception of the state of its public finances. Approval was received from the Parliament on September 14th 2011, regarding the budget that was designed for the period of 2012-2013 in order to minimize the budget deficit to zero in the year 2013, from 4.6% of Gross Domestic Product (GDP) in the year 2010 and an approximated 4% in the year 2011. Nonetheless, because of the reduction in the estimation of economic growth along with higher interest payments, it has been apparent by the month of November of the year 2011 that more funds would be required by the country in order to attain this objective. Starting a business in Italy is considered to be quite expensive rather than time consuming in Italy .In the year 2010 and in the first half of the year 2011, the country’s upturn from recession had been modest. In consequence of combination of greater fiscal difficulties, a weakening of the business confidence and sharply declining external demand, it can be expected that Italy will suffer from numerous quarters of negative quarter-to-quarter growth6. Economic Policy Economic Policy The creation of the new technocratic government has not been successful at minimizing the rate of interest on Italian government bonds considerably6. Consumer Confidence Improvements There has been significant decline in the consumer spending since April 2011. In the first three quarters of the year 2011, it was noticed that there was decline in the unadjusted value index by 0.8% year-on-year. However, after the importunate fall that initiated in the month of May of the year 2011, in the month of November of the year 2011 there was noticeable rise in the consumer confidence index to 96.5 from 93.3 in the month of October of the year 2011. It was noticed that the index remained below the average for all 12 months of 99.4. It was in the month of November 2011 when the consumers’ evaluation of the overall economic situation improved significantly7. PESTEL Analysis Prior to entering into any country, it is quite vital to conduct PESTEL analysis in order to comprehe nd the business environment of that particular country. It can be stated that the government of Italy has passed an â‚ ¬40 bn sternness program so that it can resolve its weak financial position and thus take out ways to strengthen them. It has been observed that although the government takes numerous measures in order to reduce the tax rates, it is quite high in Italy. In the year 2010, the corporate tax rate has been 31.4% which is quite higher in comparison to the EU average of 23.2%. There has been rise in the exports as well as imports to non-EU countries by