Italy business lobby urges investment, energy reform to revive growth

ROME, May 26 (Reuters) - The head of Italy's largest business lobby on Tuesday urged sweeping reforms to revive the country's near-stagnant economy, warning that ‌high energy costs and weak investment were undermining growth.

"For companies, the price ‌of energy has become an existential threat," Confindustria President Emanuele Orsini said, calling for urgent action to ​reduce costs and boost competitiveness.

Speaking at the group's annual assembly in Rome, he pointed to Italy's long-term underperformance as evidence that change is urgently needed.

The economy has grown by just 0.4% on average annually over the past 25 years, compared with 1.4% in the ‌European Union, 2.1% in the ⁠United States and 8% in China, he said.

Orsini said power costs for Italian companies are among the highest in Europe, and called ⁠for faster approvals for renewable projects, noting 4,000 permits are currently blocked while 131 gigawatts of capacity are awaiting authorisation.

Italy has installed 85 GW but needs another 50 GW within ​four ​years to meet demand, he said.

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He warned electricity ​demand could double from 300 ‌to 600 terawatt hours over the next 25 years, driven in part byartificial intelligence, and said Italy must expand grid infrastructure and speed up connections.

To guarantee stable supply, he backed long-term gas contracts for industries that cannot easily electrify and a return to nuclear power, including small modular reactors, arguing renewables alone cannot ensure continuity of ‌supply.

Beyond energy, Orsini called for policies to help ​small firms scale up, including stronger incentives for ​mergers and targeted industrial support, saying ​larger companies are more productive and internationally competitive.

Confindustria is known ‌for its calls for corporate tax cuts ​and state subsidies, while ​its member firms show little willingness to grant pay hikes to workers. Italian salaries are below the level of 1990 in inflation-adjusted terms.

However, Orsini also ​proposed a review of 575 ‌tax breaks that erode around 120 billion euros from the tax base, ​identifying 20 billion euros to reallocate equally to growth, healthcare and education.

(writing ​by Gavin Jones, editing by Gianluca Semeraro)