Crisis damage like a war, say Italy's employers Recession is hitting 'vital parts', prosperity down 10%

(ANSA) - Rome, June 28 - The economic damage being caused by the ongoing financial crisis is comparable with that provoked by a war, Italy's industrial employers' confederation Confindustria said on Thursday."Even though we are not at war, the economic damage caused up to now by the crisis is equivalent to a conflict and the most vital, precious parts of Italy's economic system are being hit," said a report by Confindustria's study centre.It said Italians will have lost a tenth of their prosperity by the end of next year because of the economic crisis."In 2013 Italy will find itself with a level of prosperity, measured in per capita gross domestic product, that is on average 10% lower than in 2007 (before the start of the crisis)," read the report. The report added that this loss would be "difficult to recover without incisive reforms that put the country back on track for growth of over 2%".It also said that 1.276 million jobs had been lost between the start of the crisis in 2008 and the beginning of this year and added that this figure is set to rise to 1.482 million by the end of 2013. Unemployment will climb to 10.9% by the end of this year, Confindustria forecast.And while stressing that Italy's public finances have improved "markedly" following Premier Mario Montìs austerity package of tax hikes and spending cuts, it said the country is not on course to meet the government's target of balancing the budget next year. The report said that the public deficit will be 1.6% of gross domestic product (GDP) in 2013. It said the deficit will be 2.6% of GDP this year because the recession will have a negative impact on the public finances. The government said the 2013 deficit would be 0.1% of GDP when it presented the austerity package in December but subsequently revised the forecast to 0.5% while stressing that this would still technically be a balanced budget as it falls within EU limits. Confindustria added that the tax hikes will take Italy's tax burden up to 54.2% in 2012 and 54.6% in 2013.