Country profilesItaly

Humanitarian profile

Former colonial power Italy has maintained ties with north and east African nations, especially with Libya. Italy actively contributes to international policy processes, such as food security, innovative financing mechanisms for health and effective aid but a reform of its laws governing aid co-operation is needed to fund a reliable and results-orientated aid programme, the OECD says.

Country snapshot

Renowned for its rich culture and architecture, Italy is also notorious for its political instability, having had several dozen governments since the end of World War II. Since the Renaissance in the fifteenth century its influence on the world's cultural and artistic life has been immense. It was one of the founding members of NATO and European integration and has been at the political heart of Europe ever since.

Persistent problems include illegal immigration, organised crime, corruption, high unemployment and a sharp divide in the prosperity of the prosperous north and the low-income south. Traditionally closely aligned with France and Germany, the government of Silvio Berlusconi has adopted a more Eurosceptic stance and sought to align Italy more closely with the United States.

Government

The president, the head of state, is elected for a seven-year term by an electoral college consisting of the members of parliament and 58 regional delegates.  The president is head of the judiciary and the armed forces. The prime minister, the head of the government, is appointed by the president following a general election and confirmed by parliament.  The parliament consists of the Senate and the Chamber of Deputies whose members are elected for five-year terms. Voting is by proportional representation, though at least 54 percent of a region's seats in the Chamber of Deputies, and 55 percent in the Senate, are awarded to the winning party or coalition irrespective of their margin of victory.

Economy

The Italian economy is the seventh largest in the world and the fourth largest in Europe. It is a major producer of chemicals, cars, textiles and machinery and agricultural products.  It is the world's biggest wine producer and exporter and the fifth most popular tourist destination.

But its average economic growth rate at just under 1.5 percent is one of the lowest in the EU and its public debt burden one of the biggest in the EU at about 105 percent of GDP. Most industrial companies are located in the richer, developed north of the country, while the less developed south, where unemployment is higher, depends mainly on agriculture and tourism.

The economy is very vulnerable to competition from developing countries. Many Italian companies make products, such as furniture, textiles and white goods that have been hit hard by exports from China and India.

Until 1999 a declining currency helped Italian exports to remain competitively priced, but that is no longer possible due to membership of the euro.  Economic hardship is becoming apparent. Some 40 percent of Italians aged 30-34 are said to be living with their parents either because they cannot find a job or because they do not earn enough to get a place of their own.

Although the global recession shrank the economy by one percent in 2008 and five percent in 2009, Italy is better placed financially than some other EU countries. The banking system is in reasonable shape, in part because it made much less use of the complex credit derivative products that wreaked such havoc in U.S. and British banks.

The housing market has not suffered sharp falls because there was no house price boom as in Spain, Ireland and the U.K. Most Italians have no mortgage and live in houses fully paid for at the time of purchase, . Average household debt levels when the recession started were very low at about 50 percent of disposable income; in the euro zone as a whole they were about 100 percent and about 150 percent in the U.S. and the U.K.  There is a very large black economy which is said to account for around 15 percent of GDP. 

History

From 1870, when the unification of the country was finally achieved, until 1922, when Mussolini's Fascists took power, Italy was a constitutional monarchy with an elected parliament.  It began World War Two as an ally of Germany before joining the Allied powers after Fascist rule ended in 1943.  It became a republic in 1946 and experienced prolonged economic growth in the 1950 and 1960s.

Social conflict and terrorist attacks in the 1970s culminated in the abduction and murder of Prime Minister Aldo Moro in 1978.

In the early 1990s political paralysis, widespread corruption and the influence of organised crime led to demands for  fundamental reforms. Judicial investigations uncovered scandals involving all major political parties as a result of which a number of parties, including the Christian Democrats, the Communists and the Socialists,  split or were dissolved. 

Media magnate Silvio Berlusconi became prime minister of a centre-right government for a few months in 1994, but centre-left coalitions held power for the rest of the decade.  Berlusconi won the elections in 2001 with a refashioned centre-right coalition dominated by his Forza Italia party. He remained in office until 2006, becoming the longest serving prime minister since the war. After a brief centre-left interlude Berusconi returned to power in 2008 at the head of his new, conservative People of Freedom party.  

Legal snapshot

The legal system is based on Roman law, particularly civil law, and on the French Napoleonic code.  Revisions to the penal code in 1990 replaced the inquisitory system with an adversarial system similar to that in countries with common law systems. 

The judicial system suffers from the influence of organized crime as well as delays caused by long pre-trial investigations and a lack of resources, says U.S. based watchdog Freedom House.

Italy was ranked 63rd in Transparency International's 2009 table of corruption perceptions in 180 nations.  Prime Minister Silvio Berlusconi has faced numerous corruption charges but has never been convicted.  A fraud trial was suspended in 2008 to allow him to campaign in elections and parliament passed a law that year giving him and other senior government ministers immunity from prosecution while in office. 

British tax lawyer David Mills was found guilty in 2009 of taking a 600,000 dollar bribe from Berlusconi in 1997. Berlusconi was not tried because of the immunity law, though it has since been ruled unconstitutional.

Freedom of speech and the press is constitutionally guaranteed but Berlusconi is able to exercise great influence on the media through his ownership of TV stations and magazines and via state-owned TV stations.

Organised crime continues to grow. The Calabria-based 'Ndrangheta crime organisation has an income of almost three percent of the country's GDP, according to Italian research institute Eurispes. The other major crime organizations are the Camorra in Campania and the Cosa Nostra in Sicily whose revenues are similar.