That's the takehome pay - there are pretty high taxes, so the total that the company is paying might be much higher, and the labor market is very rigid: at least in Italy, it's very difficult to fire someone once they have obtained a 'permanent position'. Still though, I think there are opportunities to be had; things like what Fabrizio Capobianco did with Funambol. I can only find stories in Italian that focus more on the Italian aspect of their operations:
Well, both taxes and salaries are higher in Northern Europe and our companies are still competitive so that is not the reason why the Spanish IT companies are not competitive.
And you get a lot more of them back in various ways in northern Europe.
I think it's a fairly complex question, and that's part of it. Maybe there's actually an opportunity, because I know a bunch of smart developers in Italy who work for less than they would get elsewhere. I know Italy very well, and still wonder what I'm missing, because like you say, there are taxes elsewhere too.
http://www.workingcapital.telecomitalia.it/2010/09/i-piedi-i...