Italy today is not a success story -- but neither is it the failure it is often portrayed to be.
My latest on American Thinker.
Much of the current commentary on Europe’s economic malaise follows a familiar pattern. Brussels’ central planning, green industrial policy, and debt-fueled stimulus are blamed -- often correctly -- for masking stagnation and delaying an inevitable reckoning. Southern Europe, in particular, is frequently portrayed as a collection of artificially sustained economies, kept afloat by EU subsidies, creative accounting, and bureaucratic redistribution.
There is truth in this diagnosis. But it is also incomplete. And in one crucial case -- Italy -- it risks obscuring a more complex and revealing reality.
Italy is often lumped together with Spain, Greece, or Portugal as a “problem economy”: high public debt, low growth, rigid institutions. Yet when one looks beyond headline GDP figures and focuses instead on production, exports, and global competitiveness, a different picture emerges -- one that complicates the prevailing narrative about Europe’s decline.
Over the past several years, Italy has remained among the world’s leading exporters of manufactured goods. In absolute terms, Italian exports of goods have hovered between $650 and $700 billion annually, placing the country consistently among the top global exporters -- alongside Germany and, in some periods, Japan. This is not a statistical artifact of EU transfers. It is the result of private-sector industrial capacity operating on global markets.
This distinction matters. Much of the criticism leveled at Europe focuses on growth that exists only on paper: GDP inflated by public spending, debt mutualization, or multinational profit shifting. Ireland is the textbook example. Its GDP figures are famously distorted by the accounting practices of multinational corporations, with little connection to domestic production or employment. Spain’s recent growth, too, has relied heavily on credit expansion, subsidies, and public-sector absorption, while youth unemployment remains structurally high.
Italy’s export performance, by contrast, tells a different story. It is rooted in domestic manufacturing, not financial engineering. Italian firms compete globally in machinery, industrial equipment, pharmaceuticals, chemicals, food processing, and high-end consumer goods. These are sectors that require engineering skill, supply-chain integration, and long-term capital investment. They cannot be sustained by subsidies alone.
This does not mean Italy has been immune to the distortions created by EU policy. On the contrary, Italian industry operates under some of the least favorable conditions in the developed world: high taxation, complex regulation, elevated energy costs, and constant interference from both national and European authorities. That exports have remained strong despite these constraints is not a testament to Brussels’ wisdom, but to the resilience of Italy’s productive base.
Here lies the paradox that much commentary misses: Italy’s relative economic strength exists not because of EU central planning, but despite it.
For American readers, this distinction should sound familiar. It mirrors the difference between financialized growth driven by leverage and asset inflation, and growth grounded in production, trade, and competitive enterprise. Italy, for all its flaws, still belongs to the latter category.None of this is meant to deny Europe’s broader structural problems. Centralized industrial policy, green mandates detached from market realities, and the politicization of credit allocation are all real threats. Germany’s industrial slowdown, particularly in automotive and heavy machinery, underscores how destructive these policies can be when imposed at scale. The EU’s model increasingly resembles a technocratic command economy layered on top of nominally free markets.
Where production survives, value creation survives. Where institutions interfere less -- or simply fail to crush existing structures -- private enterprise continues to function. Italy’s export sector shows that the European economy is not hollowed out across the board. It is constrained, mismanaged, and increasingly overregulated, but not yet exhausted.
This distinction has important implications. If Italy were merely another subsidy-dependent economy propped up by EU transfers, its export performance would have collapsed alongside the waning effects of stimulus. Instead, Italian exports have held up even as broader European growth slows. That suggests a floor beneath the economy that many commentators overlook.
The danger, however, is that this residual strength will not last indefinitely. Central planning does not merely fail to generate growth; over time, it actively erodes the conditions that allow private industry to function. Italy’s manufacturing base has survived decades of institutional neglect. Whether it can survive an additional decade of ideological regulation, green mandates, and fiscal extraction is an open question.
From an American perspective, the lesson is twofold. First, Europe should not be analyzed as a monolith. Beneath the bureaucratic superstructure lies a diverse set of economies with very different productive realities. Second, the real cost of Europe’s current trajectory is not immediately visible in GDP statistics. It lies in the slow suffocation of those sectors that still create real value.
Italy today is not a success story -- but neither is it the failure it is often portrayed to be. It is a stress test. Its ability to export, compete, and produce under adverse conditions reveals both the latent strength of European industry and the scale of the damage inflicted by centralized governance.
If even Italy’s industrial core begins to falter, the illusion of Europe’s economic sustainability will finally collapse. Until then, Italy remains an inconvenient counterexample -- one that challenges easy narratives about artificial economies and forces a more serious examination of what, exactly, is still holding Europe together.
