Nearly 90 percent of Italy's public spending last year was misspent, a problem that is more serious than previously believed, according to a financial police report this week.
Amid the public spending worth 4.6 billion euros (5 billion U.S. dollars) investigated by Guardia di Finanza, the country's financial police corps, 2.6 billion euros (2.8 billion dollars) was wasted and 1.5 billion euros (1.6 billion dollars) was tied to fraud, the report said.
"This level of corruption and waste is scandalous," Mauro Filippini, an economist and analyst with public advocacy group Alta Voce, told Xinhua.
"People ask why Italy's economy can't grow faster, why the public sector is not more efficient, and this phenomenon is a big part of the answer why," said Filippini.
The current government, led by 40-year-old Prime Minister Matteo Renzi, a former mayor of Florence, is trying to reverse the allegation that corruption is widely spreading in the public sector.
"Most people have an image of a leader and it takes a lot to change it," pollster Maria Rossi told Xinhua.
Italian Transport and Infrastructure Minister Maurizio Lupi resigned over his alleged involvement in a corruption scandal regarding public contracts.
Lupi's resignation was seen as the first big scandal for Renzi's government, which came to power in February 2014.
Renzi has pushed reforms in the public sector and his efforts in this area are earning praise. But recent developments like the Guardia di Finanza report and Lupi's resignation start to tarnish Renzi's image.
Giuseppe Marino, a tax law professor at the University of Milan, said economic conditions are making the task of fighting graft more difficult.
"In a slow-growing economy a lack of alternatives means some people turn to dishonest alternatives to make money," Marino said.