Text type : Formal Letter

Senders: Mario Draghi and Jean Claude Trichet

Addressee: The Italian Prime Minister : Silvio Berlusconi

Date : 5 August 2011

The opening paragraph has the function to introduce the topic. It concernes the situation in Italy’s bond market. The Governing Council considers that processing action by the Italian authorities is essential to restore the confidance of investitors.

The second paragraph covers an important role because it contains the thesis or the request according to which Italy needs to urgently underpin the standing of its sovereign signature and its committent to fiscal sustainability and structural reforms.

The third paragraph consist of a list of Italy’s urgent needs.

First of all Italy needs significant misures to enhance potential growth:

1.      Increase competition to improve the quality of public services

2.     Design regulatory and fiscal systems better suited to support firms' competitiveness and efficiency of the labour market.

3.     reform strategy liberalizing public services

4.     reform the collective wage bargaining system

5.     A rewiev of the rules regulating the hiring and dismissal of employees

6.     The establishment of an employment insurance system

7.     The reallocation of resources in view of more competitive firms and sectors

Secondly Italy has the necessity to take immediate and bold measures to ensuring the sustainability of public finances:

1.      additional – corrective fiscal measures

2.     An intervention in the pension system

3.     The reduction of the cost of public employees

4.     The introduction of an automatic clause that reduces deficit

5.     Commercial debt should be placed under control

The third need is to take measures to overhaul of the public administartion to improve administrative efficiency and business. The use of  performance indicators should be systematic and there is a need for a strong committent to abolish or consolidate some intermediary administrative layers. The senders also underline the cruciality of the situation and invite the Governament to intervene as soon as possible.

As a conclusion Mario Draghi and Trichet trust the parliament that should take the appropriate actions in order to improve Italy and its conditions.