(By Sandra Cordon) Rome, May 23 - The government must move very quickly to cut taxes and deliver other growth policies if it is to save the Italian economy from collapse, the head of the country's powerful industrialists' association Confindustria said Thursday following a 3% plunge in early trading on Milan's leading financial market. The Italian and European markets were weakened over fears triggered by manufacturing reports that Asia's two largest economies - China and Japan - are showing significant signs of stress. Growth must be the nation's single most important objective in order to pull Italy out of the longest recession in recorded history, Confindustria President Giorgio Squinzi said. Otherwise annual growth will remain stalled at levels of no more than 0.5% - well below the rate of inflation, and well below what is needed to generate employment and higher productivity, he said. "The goal must now be just one: a return to growth," Squinzi said at the organization's annual assembly in Rome. The country's well-being depends on learning to "leverage its resources," to boost the economy, he added. Italy is now stuck in the longest recession on record with seven straight quarterly drops in gross domestic product (GDP) amid rising costs and unemployment all making it harder for individuals and companies to improve their lot. Last week, national statistics agency Istat reported that GDP fell 0.5% in the first three months of 2013. Weakness in Italy's northern industrial base is a harbinger of the trouble to come, warned Squinzi. "The north is on the brink of an abyss...that would drag our country back a half-century," Squinzi warned. That weakness, developing in what has traditionally been the country's economic and industrial base, is a clear sign that the government of Premier Enrico Letta must develop strong policies to boost growth, he added. Cutting business taxes is essential to encouraging investment and growth, said Squinzi. The government's recent decision to suspend the unpopular IMU property tax was a good start, but more is needed. "We appreciate the commitment that the government has taken with the IMU decree, (and we) ask for a tax to support those who create and distribute wealth, transparent and respectful of the rights of citizens and businesses," he said. Squinzi also called on the government to slash other business taxes, including social security contributions. He particularly singled out the regional tax on productive activities (IRAP) for reform. Such measures would help business to grow and add employees, he said, describing unemployment as "the mother of all social evil". "Joblessness must be countered in a balanced and structural way, adjusting costs, productivity and regulations," said Squinzi. "Companies are ready to support government action with investments and employment". According to forecasts released earlier this month by Istat, unemployment will rise to 11.9% this year, up 1.2% in 2012, and climb further still in 2014 to reach 12.3%. Youth employment reached 38.4% in March, 3.2% higher than the same month in 2012, the statistics agency said.