Maybe1day

Check it out, from a previous post (76). The 5.5 % was taken from the table therein. Sorry, I made a mistake the figure was for the 12 month period.
http://epp.eurostat.ec.europa.eu/cac...2014-AP-EN.PDF

The Official ISTAT Public Debt figure for December 2013 was 2104 Billion so the Public debt has increased by 64 Billion in 6 months (ISTAT Qtr 2 2014) ie that is just over 3% and the drop in PIL is 0.3%. This is would be projected as running out at over 6% for the fiscal year. This would be slightly worse than the French, and nowhere near the Renzi quoted 2.9%.

Maybe1day

Hi Sancho,
Thats' heavy reading, there are some odd ups and downs in there and I don't purport to understand them, ISTAT figures are enough for me. What is the level of the submerged economy and does this mean that the Mafia etc are partners of the state? The submerged economy is guesswork and as such provides an easy way out for the Gov. Which other EU countries are using this scapegoat path. Does this also mean that other countries contributions to the EU could be based on the the sale of drugs and human trafficking in another country.

Ruby2

Drugs and prostitution to be included in UK national accounts | Society | The Guardian

The UK use these figures too.

Seldomseenkid

This change in the way GDP is calculated was obviously done with the sole intention of covering up the fact that so many European governments were breaking the three percent deficit to GDP rule by the simple ruse of artificially increasing GDP by guesstimating some extra economic activity. Frankly I am appalled by this, it is the sort of corrupt action I expect from politicians but now it seems the statisticians cannot be trusted either.

sunnysider

interesting post seldomseen kid.

I fear you may be onto something since it does, on the face of it, seem an extraordinary decision.

As has been pointed out, the new methodology applies to all countries, but it does benefit some more than others.

I fear that Europe is an expert at undermining its own credibility.

Forgive my economic ignorance but are these figures broken down in any way?

ie: can we learn that the Italian prostitution industry sector has an annual turnover of ****E, while Team GB prostitution turns over £***?

Similarly for organised crime?

What next - a European racketeering Olympics/Jeux Sans Frontieres?

Sancho

I didn't think I'd need to explain this. Anyway

Nominal GDP

Prostitution, gambling, drug-dealing, etc are indisputably parts of the economic activity of a country. People pay for them, other people are paid, money changes hands… Whether you disapprove of them or they're illegal is beside the point. Morality doesn't come into it. Nor does it matter that they're even harder to estimate or to tax than above-the-surface activity. You just do your best.

P.S. If GDP figures are going to be used to compare countries (e.g. across the EU), they should be measuring the same activity in each country. As I understand it, this inclusion of drugs etc in national GDP figures is meant eventually to apply to all EU countries.

sunnysider

sorry sancho, thanks for all your information posts, but I disagree with you.

I fully accept that such activities represent economic activity and don't need this explaining to me.

And there are no doubt many hard working racketeers providing a good life for their families. Some of them no doubt put in serious hours in their chosen line of work.

But I have no more interest in the "money changing hands" in such activities than I have in "money changing hands" in the high level financial manipulations/fraud (no I'm not a purist hair shirt hippy and banks have their place) which recently nearly brought Britain and much of Europe close to disaster.

For both shirk their social obligations.

Though both doubtless think that they have none.

Call me old-fashioned and naive but I think the difficulty (near impossibility in many cases) of taxing these activities is of central and basic importance.

And another problem which seems to be staring us in the face unless you head off into the realms of pure cynicism. Doesn't this present the government of a country with a certain conflict of interest? In Italy, despite its many many problems which are clear to anyone except the brain dead or morally blind, there are still some very brave (brave beyond my level of understanding) individuals fighting organised crime.

Many of these have given their lives. I need hardly name to you or other forum members some of these names. In my opinion, they should be made secular saints.

Now the government, intellectual and clever as it (and Italians governments have been blessed with some very clever, intellectual and subtle people) might very easily feel that it is not in its own best interests to pursue organised crime (a pursuit which has been very fitful in Italy's history to put it mildly) as they would be undermining economic activity, and maybe in some cases putting these captains of industry/providers of jobs/contributors to civic buildings/contributors to church collection pots/local sagras behind bars.

And they then just might, just might feel that it was wise after all for sections of the Italian state to betray its finest servants by putting them in the path of a bullet/bomb.

My comments may seem somewhat exaggerated but not to anyone who knows Italian history. Or chooses not to sweep it under the carpet with a tolerant cynical shrug.

And again consider me old-fashioned and naive, but I think that a decent tax system which can at least lay claim to a fairly general consent and acceptance is central to any idea of nationhood. So, yes, the problem of taxing illegal activities is an important point. I fully realise of course that this has long been a problem for Italy.

I fully accept and accept that these activities are being included in the statistics for all EU countries and I made this clear in my last post.

In connection with which I asked a question, which might have seemed flippant, but which had a serious concern at its core.

If you know the answer, feel free to answer.

Thanks again for your information posts.

Capo Boi

For the UK, the sex and drug industry is estimated to add around £10.5 Bn. (0.75%) to GDP numbers. Split at around £5.5 Bn. for sex and £5 Bn. for drugs. Around 60,000 prostitutes and 2.25 milion casual and regular drug users.

Not seen any numbers for Italy, but given UK - Italy populations are roughly similar, it's probably reasonable to expect similar numbers.

sunnysider

Thanks for that split capo Boi - am always amazed by your knowledge of such such things though you consistently claim to be a simple soul.

Any more figures?

Can I ask for your source?

You can't, though, surely, argue that these figures can just be extrapolated to other countries based on relative populations, otherwise all countries would be the same. And if 1,000 Brits eat x portions of fish and chips a year, 2,000 Italians eat x times 2. And many other examples. And the world would be a far less interesting place.

Capo Boi

Source is Office for National Statistics. I think they begun compiling around 5 years ago.
I think in Western European economies it's reasonable to extrapolate by population. The numbers will never be accurate but provide I think a good guide. You wouldn't compare fish and chip consumption between the UK and Italy but percentage of family budget spent on food is not too different. Away from Western Europe prostitution is proportionately higher in the Far East, likewise drug useage considerably lower in the Middle East.

Maybe1day

To bring the estimate increase in Public debt in Italy within the oft quoted 3%, would require substantially more than the UK 10 Billion, something more like 60 Billion. In the first 2 qtrs of this year the increase in PD was 64 Billion.

Presumably the Eastern EU countries have a very high level of hidden income due to the monies sent home by their citizens illicit activities elsewhere in the EU (Foreigners make up over 25% of criminals in prisons in Italy). Does this money count twice ie in both countries?

modicasa

Just the Camorra have a 'GDP' of 11 billion pa, according to informed sources. Add in the Sicilian mafia, 'Ndrangheta and SCU you would arrive at around 35 billion -

Sancho

I don't know the answer, but this might help you find it for yourself - it has the sources

Italia, con sommerso il nuovo pil 2013 aumenta di quasi 59 miliardi - MilanoFinanza.it

Try this as well

Principali aggregati del Prodotto interno lordo - dati nazionali annuali (milioni di euro)

If the figures aren't there separately (x for drug-dealing, x for smuggling, etc), there may be a figure somewhere for all of them all together, either included under "goods and services" (a pis aller - better there than in "agriculture" or "industry" at any rate), or in a separate category - possibly called something like "other".

sunnysider

By sheer coincidence it turned out that this question of including illegal businesses in EU stats turned up in the Friday edition of Brit TV's "Have I got News for you". I saw a rerun over the weekend. After the usual satirical/flippant/sarky comments from the panel the chair gave some apparently authoritative figures for UK prostitution and illegal drug sectors (I presume they now have their business activity numbers/codes ie: 101 - nick-nack retailing, 102 - hard drug retailing with allowable expenses for necessary business tools like chain saws - favoured by the camorra I gather) - quite possibly the same as Capo's - I will try to rerun that bit and put the figures and source here.

all the best

Maybe1day

So it is the same cover up as last year, the 59 billion looks like a most convenient figure. only one word ...........DISGUSTED................