Italy by this time had pretty remarkable institutional problems that were already severely imperiling productivity growth. They embarked on a spectacular campaign of liberalizing labor markets to keep wages low introducing short-term contracts cutting public spending wherever possible making hiring and firing more easy privatization was a huge thing in the 90s. All done under the pretext of getting inflation down of getting the debt level down italy is stock of holiday that is very high and remains very high, surprisingly given the absence of growth.