The large scale of Italy's underground economy increases the burden on law-abiding taxpayers, causes distortions and reduces the competitiveness of the majority of firms, said Mario Draghi, the governor of the Bank of Italy.

Draghi said these effects were more pronounced in the current phase of economic crisis. He said in addition to stepping up audits and sanctions, it was necessary to reduce the areas of evasion by lowering, in the medium term, statutory tax rates, which was to be made