U.S. Department of State, July 2000
Bureau of European Affairs

Background Notes: Italy

Official Name: Republic of Italy

PROFILE
Geography
Area: 301,225 sq. km. (116,303 sq. mi.); about the size of
Georgia and Florida combined.
Cities: Capital--Rome (pop. 2.7 million). Other
cities--Milan, Naples, Turin.
Terrain: Mostly rugged and mountainous.
Climate: Generally mild Mediterranean; cold northern winters.
People
Nationality: Noun and adjective--Italian(s).
Population: 56.9 million.
Annual growth rate: 1.4%.
Ethnic groups: Primarily Italian, but there are small groups
of German-, French-, Slovene-, and Albanian-Italians.
Religion: Roman Catholic (majority).
Language: Italian (official).
Education: Years compulsory--14. Literacy--98%.
Health: Infant mortality rate--8/1,000 live births. Life
expectancy--74 yrs.
Work force (23 million): Services--61%. Industry and
commerce--32%. Unemployed--11%. Agriculture--7%.

Government
Type: Republic since June 2, 1946.
Constitution: January 1, 1948.
Branches: Executive--president (chief of state), Council of
Ministers (cabinet), headed by the president of the council
(prime minister).
Legislative--bicameral Parliament: 630-member Chamber of
Deputies, 325-member Senate. Judicial--independent
constitutional court and lower magistracy.
Subdivisions: 94 provinces, 20 regions.
Political parties: Christian Democratic Center, Communist
Renewal, Democrats, Democratic Party of the Left, Forza
Italia, Greens, Italian People's Party, Italian Communists,
Italian Renewal, National Alliance, Northern League,
Republican, Socialist.
Suffrage: Universal over 18.

Economy
GDP (1999): $1.17 trillion.
Per capita income (1999 est.): $20,000.
GDP growth (1999 est.): 1.4%.
Natural resources: Fish, natural gas.
Agriculture: Products--wheat, rice, grapes, olives, citrus
fruits.
Industry: Types--automobiles, machinery, chemicals,
textiles, shoes.
Trade (1999): Exports--$229 billion: mechanical products,
textiles and apparel, transportation equipment, metal
products, chemical products, food and agricultural products.
Partners--EU 55%, U.S. 7%, OPEC 3%. Imports--$215 billion:
machinery and transport equipment, foodstuffs, ferrous and
nonferrous metals, wool, cotton, energy products.
Partners--EU 61%, OPEC 6%, U.S. 5%.

HISTORY

Italy is largely homogeneous linguistically and religiously
but is diverse culturally, economically, and politically.
Italy has the fifth-highest population density in
Europe--about 200 persons per square kilometer (490/sq.
mi.). Minority groups are small, the largest being the
German-speaking people of Bolzano Province and the Slovenes
around Trieste. Other groups comprise small communities of
Albanian, Greek, Ladino, and French origin. Although Roman
Catholicism is the majority religion--85% of native-born
citizens are nominally Catholic--all religious faiths are
provided equal freedom before the law by the constitution.
Greeks settled in the southern tip of the Italian Peninsula
in the eighth and seventh centuries B.C.; Etruscans, Romans,
and others inhabited the central and northern mainland. The
peninsula subsequently was unified under the Roman Republic.
The neighboring islands also came under Roman control by the
third century B.C.; by the first century A.D., the Roman
Empire effectively dominated the Mediterranean world. After
the collapse of the Roman Empire in the west in the fifth
century A.D., the peninsula and islands were subjected to a
series of invasions, and political unity was lost. Italy
became an oft-changing succession of small states,
principalities, and kingdoms which fought among themselves
and were subject to ambitions of foreign powers. Popes of
Rome ruled central Italy; rivalries between the popes and
the Holy Roman Emperors, who claimed Italy as their domain,
often made the peninsula a battleground.

The commercial prosperity of northern and central Italian
cities, beginning in the 11th century, and the influence of
the Renaissance mitigated somewhat the effects of these
medieval political rivalries. Although Italy declined after
the 16th century, the Renaissance had strengthened the idea
of a single Italian nationality. By the early 19th century,
a nationalist movement developed and led to the
reunification of Italy--except for Rome--in the 1860s. In
1861, Victor Emmanuel II of the House of Savoy was
proclaimed King of Italy. Rome was incorporated in 1870.
From 1870 until 1922, Italy was a constitutional monarchy
with a parliament elected under limited suffrage.

20th-Century History

During World War I, Italy renounced its standing alliance
with Germany and Austria-Hungary and, in 1915, entered the
war on the side of the Allies. Under the postwar settlement,
Italy received some former Austrian territory along the
northeast frontier. In 1922, Benito Mussolini came to power
and, over the next few years, eliminated political parties,
curtailed personal liberties, and installed a fascist
dictatorship termed the Corporate State. The king, with
little or no effective power, remained titular head of
state.

Italy allied with Germany and declared war on the United
Kingdom and France in 1940. In 1941, Italy--with the other
Axis powers, Germany and Japan--declared war on the United
States and the Soviet Union. Following the Allied invasion
of Sicily in 1943, the King dismissed Mussolini and
appointed Marshal Pietro Badoglio as premier. The Badoglio
government declared war on Germany, which quickly occupied
most of the country and freed Mussolini, who led a
brief-lived regime in the north. An anti-fascist popular
resistance movement grew during the last 2 years of the war,
harassing German forces before they were driven out in April
1945. The monarchy was ended by a 1946 plebiscite, and a
constituent assembly was elected to draw up plans for the
republic.

Under the 1947 peace treaty, minor adjustments were made in
Italy's frontier with France. The eastern border area was
transferred to Yugoslavia, and the area around the city of
Trieste was designated a free territory. In 1954, the free
territory, which had remained under the administration of
U.S.-U.K. forces (Zone A, including the city of Trieste) and
Yugoslav forces (Zone B), was divided between Italy and
Yugoslavia, principally along the zonal boundary. This
arrangement was made permanent by the Italian-Yugoslav
Treaty of Osimo, ratified in 1977 (currently being discussed
by Italy, Slovenia, and Croatia). Under the 1947 peace
treaty, Italy also gave up its overseas territories and
certain Mediterranean islands.

The Roman Catholic Church's status in Italy has been
determined, since its temporal powers ended in 1870, by a
series of accords with the Italian Government. Under the
Lateran Pacts of 1929, which were confirmed by the present
constitution, the state of Vatican City is recognized by
Italy as an independent, sovereign entity. While preserving
that recognition, in 1984, Italy and the Vatican updated
several provisions of the 1929 accords. Included was the end
of Roman Catholicism as Italy's formal state religion.

Italy's Cultural Contributions

Europe's Renaissance period began in Italy during the 14th
and 15th centuries. Literary achievements--such as the
poetry of Petrarch, Tasso, and Ariosto and the prose of
Boccaccio, Machiavelli, and Castiglione--exerted a
tremendous and lasting influence on the subsequent
development of Western civilization, as did the painting,
sculpture, and architecture contributed by giants such as da
Vinci, Raphael, Botticelli, Fra Angelico, and Michelangelo.

The musical influence of Italian composers Monteverdi,
Palestrina, and Vivaldi proved epochal; in the 19th century,
Italian romantic opera flourished under composers Gioacchino
Rossini, Giuseppe Verdi, and Giacomo Puccini. Contemporary
Italian artists, writers, filmmakers, architects, composers,
and designers contribute significantly to Western culture.

GOVERNMENT

Italy has been a democratic republic since June 2, 1946,
when the monarchy was abolished by popular referendum. The
constitution was promulgated on January 1, 1948.

The Italian state is highly centralized. The prefect of each
of the provinces is appointed by and answerable to the
central government. In addition to the provinces, the
constitution provides for 20 regions with limited governing
powers. Five regions--Sardinia, Sicily, Trentino-Alto Adige,
Valle d'Aosta, and Friuli-Venezia Giulia--function with
special autonomy statutes. The other 15 regions were
established in 1970 and vote for regional "councils." The
establishment of regional governments throughout Italy has
brought some decentralization to the national governmental
machinery.

The 1948 constitution established a bicameral Parliament
(Chamber of Deputies and Senate), a separate judiciary, and
an executive branch composed of a Council of Ministers
(cabinet) which is headed by the president of the council
(prime minister). The president of the republic is elected
for 7 years by the Parliament sitting jointly with a small
number of regional delegates. The president nominates the
prime minister, who chooses the other ministers. The Council
of Ministers--in practice composed mostly of members of
Parliament--must retain the confidence of both houses.

The houses of Parliament are popularly and directly elected
by a mixed majoritarian and proportional representation
system. Under 1993 legislation, Italy has single-member
districts for 75% of the seats in Parliament; the remaining
25% of seats are allotted on a proportional basis. The
Chamber of Deputies has 630 members. In addition to 315
elected members, the Senate includes former presidents and
several other persons appointed for life according to
special constitutional provisions. Both houses are elected
for a maximum of 5 years, but either may be dissolved before
the expiration of its normal term. Legislative bills may
originate in either house and must be passed by a majority
in both.

The Italian judicial system is based on Roman law modified
by the Napoleonic code and subsequent statutes. There is
only partial judicial review of legislation in the American
sense. A constitutional court, which passes on the
constitutionality of laws, is a post-World War II
innovation. Its powers, volume, and frequency of decisions
are not as extensive as those of the U.S. Supreme Court.

Principal Government Officials

President--Carlo Azeglio Ciampi
Prime Minister--Giuliano Amato
Foreign Minister--Lamberto Dini
Ambassador to the United States--Ferdinando Salleo
Italy maintains an embassy in the United States at 3000
Whitehaven Street NW, Washington, DC 20008 (tel.
202-328-5500).

POLITICAL CONDITIONS

There have been frequent government turnovers since 1945.
The dominance of the Christian Democratic (DC) Party during
much of the postwar period lent continuity and comparative
stability to Italy's political situation. From 1992 to 1997,
Italy faced significant challenges as voters-- disenchanted
with past political paralysis, massive government debt,
extensive corruption, and organized crime's considerable
influence-- demanded political, economic, and ethical
reforms. In 1993 referendums, voters approved substantial
changes, including moving from a proportional to a largely
majoritarian electoral system and the abolishment of some
ministries.

Major political parties, beset by scandal and loss of voter
confidence, underwent far-reaching changes. New political
forces and new alignments of power emerged in March 1994
national elections: There was a major turnover in the new
parliament, with 452 out of 630 deputies and 213 out of 315
senators elected for the first time. The 1994 elections also
swept media magnate Silvio Berlusconi--and his "Freedom
Pole" coalition--into office as Prime Minister. However,
Berlusconi was forced to step down in January 1995 when one
member of his coalition withdrew support. The Berlusconi
government was succeeded by a technical government headed by
Prime Minister Lamberto Dini, which fell in early 1996.

In April 1996, national elections were again held and led to
the victory of a center-left coalition (the Olive Tree) led
by Romano Prodi. Prodi's government became the third-longest
to stay in power before he narrowly lost a vote of
confidence (by three votes) in October 1998. A new
government was formed by Democratic Party of the Left leader
and former-communist Massimo D'Alema. Like Prodi's
government, D'Alema's coalition included the Democratic
Party of the Left (DS), the Italian People's Party (PPI),
the newly created Italian Communist Party (split from the
Communist Renewal in October 1998) and other small,
center-left groups. D'Alema resigned following the
center-left losses in regional elections and was succeeded
in April 2000 by Giuliano Amato. In May 1999, the Parliament
selected Carlo Azeglio Ciampi as the new Italian President
(replacing Oscar Luigi Scalfaro). Ciampi, a former Prime
Minister, and serving Minister of Treasury, was elected on
the first ballot with an easy margin over the required
two-thirds votes.

Political Parties

Italy's dramatic self-renewal transformed the political
landscape between 1992 and 1997. Scandal investigations
touched thousands of politicians, administrators, and
businessmen; the shift from a proportional to majoritarian
voting system--with the requirement to obtain a minimum of
4% of the national vote to obtain representation--also
altered the political landscape. Party changes were
sweeping. The Christian Democratic party dissolved; the
Italian People's Party and the Christian Democratic Center
emerged. Other major parties, such as the Socialists, saw
support plummet. New movements such as Forza Italia, led by
former Prime Minister Berlusconi, gained wide support. The
National Alliance broke from the neofascist Italian Social
Movement. A trend toward two large coalitions--one on the
center-left and the other on the center-right--emerged from
the April 1995 regional elections. For the 1996 national
elections, the center-left parties created the Olive Tree
coalition while the center right united again under the
Freedom Pole. This emerging bipolarity represents a major
break from the fragmented, multiparty political landscape of
the postwar era, but attempts were defeated in 1999 and
again in 2000 to remove the last vestiges of theproportional
system of representation. The three largest parties in the
Chamber are Democratic Party of the Left, Forza Italia, and
the National Alliance. The same rankings generally apply in
the Senate.

ECONOMY

The Italian economy has changed dramatically since the end
of World War II. From an agriculturally based economy, it
has developed into an industrial state ranked as the world's
fifth-largest industrial economy. Italy belongs to the Group
of Eight (G-8) industrialized nations; it is a member of the
European Union and the OECD.

Italy has few natural resources. With much of the land
unsuited for farming, it is a net food importer. There are
no substantial deposits of iron, coal, or oil. Proven
natural gas reserves, mainly in the Po Valley and offshore
Adriatic, have grown in recent years and constitute the
country's most important mineral resource. Most raw
materials needed for manufacturing and more than 80% of the
country's energy sources are imported. Italy's economic
strength is in the processing and the manufacturing of
goods, primarily in small and medium-sized family-owned
firms. Its major industries are precision machinery, motor
vehicles, chemicals, pharmaceuticals, electric goods, and
fashion and clothing. Italy is in the midst of a slow
economic recovery but lags behind most of its west European
neighbors. Italy's economy accelerated from anemic 0.7%
growth in 1996 to 1.4% in 1999, still one of the lowest
growth rates among industrialized economies. Domestic demand
and exports were the dominant factors in GDP growth. Most
economic forecasters expect GDP growth to increase to around
2.8% in 2000. While exports declined during 1999, imports
grew, resulting in a trade surplus of $14 billion in 1999,
down from $27 billion in 1998, and $47.1 billion in 1997.
Italy has continued to build foreign exchange reserves to
$80 billion in 1998, a record high.

On inflation, Italy is now firmly within norms specified for
Economic and Monetary Union (EMU), a major achievement for
this historically inflation-prone country. Consumer
inflation fell from 3.9% in 1996 to 1.5% in 1997, but rose
gradually to 1.9% in 1999. The 2000 target of 1.5% seems
well within reach. The 1992 agreement on wage adjustments,
which has helped keep wage pressures on inflation low,
remains in effect. Tight monetary policy by the Bank of
Italy also has helped bring inflation expectations down.

Since 1992, economic policy in Italy has focused primarily
on reducing government budget deficits and reining in the
national debt. Successive Italian governments have adopted
annual austerity budgets with cutbacks in spending, as well
as new revenue raising measures. Italy has enjoyed a primary
budget surplus, net of interest payments, for the last 7
years. The deficit in public administration is expected to
decline to 1.5% of GDP in 2000, down from 7% in 1995. Italy
joined the European Monetary Union in May 1998.

The national debt should continue to decline slowly. It
stabilized in 1995 at roughly 124% of GDP and is expected to
decline to 111% of GDP in 2000. Given the heavy weight of
interest payments in government expenditures, public
finances remain susceptible to international capital market
developments, as well as domestic political developments.

Italy's closest trade ties are with the other countries of
the European Union, with whom it conducts about 59% of its
total trade. Italy's largest EU trade partners, in order of
market share, are Germany (18%), France (13%), and the
United Kingdom (7%).

U.S.-Italy Economic Relations

The U.S.-Italian bilateral relationship is strong and
growing. The U.S. and Italy cooperate closely on major
economic issues, including within the G-8. With a large
population and a high per capita income, Italy is one of the
United States' most important trade partners. In 1999, the
United States was the fourth-largest foreign supplier of the
Italian market (with a market share of 5.6%) and the largest
supplier outside the EU. Total trade between the United
States and Italy exceeded $30 billion in 1999. The U.S. ran
more than a $6 billion deficit with Italy.

Significant changes are occurring in the composition of this
trade which could narrow the gap. More value-added products
such as office machinery and aircraft are becoming the
principal U.S. exports to Italy. The change reveals the
growing sophistication of the Italian market, and bilateral
trade should expand further. During 1998, the United States
imported about $19 billion in Italian goods while exporting
about $11.3 billion in U.S. goods to Italy. U.S. foreign
direct investment in Italy at the end of 1998 exceeded $14.3
billion; Italian investment in the U.S. was roughly $9
billion.

Labor

Unemployment remains high (a 12.2% high in 1998 declined to
10.7% by mid-year 2000). It is especially severe in the
south where average unemployment for the year was more than
22%. Women and youth have significantly higher rates of
unemployment than men. A rigid labor market has served as a
disincentive to job creation. There is a significant
underground economy absorbing substantial numbers of people,
but they work for low wages and without standard social
benefits and protections.

Unions claim to represent some 35% of the work force. Most
Italian unions are grouped in four major confederations: the
Confederation of Labor (CGIL), the Italian Confederation of
Workers' Unions (CISL), the Italian Union of Labor (UIL),
and the General Union of Labor (UGL). These confederations
formerly were associated with important political parties or
currents, but they have formally terminated such ties.
Nowadays, the four often coordinate their positions before
confronting management or lobbying the government. The
confederations have an important consultative role on
national social and economic issues. Among their major
agreements are a 4-year wage moderation agreement signed in
1993, a reform of the pension system in 1995, an employment
pact, introducing steps for labor market flexibility in
economically depressed areas, in 1996, and a 1998 "Christmas
Pact" that renewed previous social accords and introduced
tax reductions for workers and employers. The CGIL, CISL,
and UIL are affiliates of the International Confederation of
Free Trade Unions, affiliated with the World Confederation
of Labor (WCL).

Agriculture

Italy's agriculture is typical of the division between the
agricultures of the northern and southern countries of the
European Union. The northern part of Italy produces
primarily grains, sugarbeets, soybeans, meat, and dairy
products, while the south specializes in producing fruits,
vegetables, olive oil, wine, and durum wheat.

Even though much of its mountainous terrain is unsuitable
for farming, Italy has a large work force (1.4 million)
employed in farming. Most farms are small, with the average
farm only seven hectares.

For further economic and commercial information, please
refer to the "Country Commercial Guide" for Italy, available
on the State Department web page at www.state.gov.

FOREIGN RELATIONS

Italy was a founding member of the European Community--now
the European Union (EU). Italy was admitted to the United
Nations in 1955 and is a member and strong supporter of the
North Atlantic Treaty Organization (NATO), the Organization
for Economic Cooperation and Development (OECD), the General
Agreement on Tariffs and Trade/World Trade Organization
(GATT/WTO), the Organization for Security and Cooperation in
Europe (OSCE), the Western European Union (WEU), and the
Council of Europe. It chaired the CSCE and the G-7 in 1994
and the EU in 1996. Italy firmly supports the United Nations
and its international security activities. Italy actively
participated in and deployed troops in support of UN
peacekeeping missions in Somalia, Mozambique, and Cambodia
and provides critical support for NATO and UN operations in
Bosnia, Kosovo, and Albania.

The Italian Government seeks to obtain consensus with other
European countries on various defense and security issues
within the WEU as well as NATO. European integration and the
development of common defense and security policies will
continue to be of primary interest to Italy.

U.S.-ITALY RELATIONS

The United States enjoys warm and friendly relations with
Italy. The two are NATO allies and cooperate in the United
Nations; in various regional organizations; and bilaterally
for peace, prosperity, and defense. Italy has worked closely
with the United States and others on such issues as NATO and
UN operations in Bosnia and Kosovo; sanctions against the
former Yugoslavia; assistance to Russia and the New
Independent States (NIS); Middle East peace process
multilateral talks; Somalia and Mozambique peacekeeping; and
combating drug trafficking, trafficking in women and
children, and terrorism.

Under longstanding bilateral agreements flowing from NATO
membership, Italy hosts important U.S. military forces at
Vincenza and Livorno (Army); Aviano (Air Force); and
Sigonella, Gaeta, and Naples--home port for the U.S. Navy
Sixth Fleet. The United States has about 17,000 military
personnel stationed in Italy. Italy hosts the NATO War
College in Rome.

Italy remains a strong and active transatlantic partner
which, along with the United States, has sought to foster
democratic ideals and international cooperation in areas of
strife and civil conflict. Toward this end, the Italian
Government has cooperated with the U.S. in the formulation
of defense, security, and peacekeeping policies.

Principal U.S. Officials

Ambassador--Thomas Foglietta
Deputy Chief of Mission--William Pope
Political Affairs--Mark Dillon
Economic Affairs--Margaret Dean
Public Affairs--Robert Callahan
Commercial Affairs-Robert Connan
Agricultural Section--Elizabeth Berry
Defense Attache--Capt. Vincent P. Mocini, USN
Consular Posts
Consul General, Florence--Hilarion Martinez
Consul General, Milan--Ruth Van Heuven
Consul General, Naples--Clyde Bishop
The U.S. embassy in Italy is located at Via Veneto 119, Rome
(tel. (39)(06) 46741 The URL for the embassy web page is:
http://www.usis. it/mission/

TRAVEL AND BUSINESS INFORMATION

The U.S. Department of State's Consular Information Program
provides Consular Information Sheets, Travel Warnings, and
Public Announcements. Consular Information Sheets exist for
all countries and include information on entry requirements,
currency regulations, health conditions, areas of
instability, crime and security, political disturbances, and
the addresses of the U.S. posts in the country. Travel
Warnings are issued when the State Department recommends
that Americans avoid travel to a certain country. Public
Announcements are issued as a means to disseminate
information quickly about terrorist threats and other
relatively short-term conditions overseas which pose
significant risks to the security of American travelers.
Free copies of this information are available by calling the
Bureau of Consular Affairs at 202-647-5225 or via the
fax-on-demand system: 202-647-3000. Consular Information
Sheets and Travel Warnings also are available on the
Consular Affairs Internet home page:
http://travel.state.gov. Consular Affairs Tips for Travelers
publication series, which contain information on obtaining
passports and planning a safe trip abroad are on the
internet and hard copies can be purchased from the
Superintendent of Documents, U.S. Government Printing
Office, telephone: 202-512-1800; fax 202-512-2250.

Emergency information concerning Americans traveling abroad
may be obtained from the Office of Overseas Citizens
Services at (202) 647-5225. For after-hours emergencies,
Sundays and holidays, call 202-647-4000.

Passport information can be obtained by calling the National
Passport Information Center's automated system ($.35 per
minute) or live operators 8 a.m. to 8 p.m. (EST)
Monday-Friday ($1.05 per minute). The number is
1-900-225-5674 (TDD: 1-900-225-7778). Major credit card
users (for a flat rate of $4.95) may call 1-888-362-8668
(TDD: 1-888-498-3648). It also is available on the internet.
Travelers can check the latest health information with the
U.S. Centers for Disease Control and Prevention in Atlanta,
Georgia. A hotline at 877-FYI-TRIP (877-394-8747) and a web
site at http://www.cdc.gov/travel/index.htm give the most
recent health advisories, immunization recommendations or
requirements, and advice on food and drinking water safety
for regions and countries. A booklet entitled Health
Information for International Travel (HHS publication number
CDC-95-8280) is available from the U.S. Government Printing
Office, Washington, DC 20402, tel. (202) 512-1800.

Information on travel conditions, visa requirements,
currency and customs regulations, legal holidays, and other
items of interest to travelers also may be obtained before
your departure from a country's embassy and/or consulates in
the U.S. (for this country, see "Principal Government
Officials" listing in this publication).

U.S. citizens who are long-term visitors or traveling in
dangerous areas are encouraged to register at the U.S.
embassy upon arrival in a country (see "Principal U.S.
Embassy Officials" listing in this publication). This may
help family members contact you in case of an emergency.

Further Electronic Information

Department of State Foreign Affairs Network. Available on
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at http://www.state.gov.

U.S. Foreign Affairs on CD-ROM (USFAC). Published on an
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information from 1990 to the present. Contact the
Superintendent of Documents, U.S. Government Printing
Office, P.O. Box 371954, Pittsburgh, PA 15250-7954. To
order, call (202) 512-1800 or fax (202) 512-2250.

National Trade Data Bank (NTDB). Operated by the U.S.
Department of Commerce, the NTDB contains a wealth of
trade-related information. It is available on the Internet
(www.stat-usa.gov) and on CD-ROM. Call the NTDB Help-Line at
(202) 482-1986 for more information.