Ethnic groups: Primarily Italian, but there are small groups of German-, French-, Slovene-, and Albanian-Italians.
Agriculture: Products--wheat, rice, grapes, olives, citrus fruits, potatoes, sugar beets, soybeans beef, dairy products.
Industry: Types--tourism, machinery, iron and steel, chemicals, food processing, textiles, motor vehicles, clothing, footwear, ceramics.
Trade: Exports (2009)--$402.9 billion f.o.b.: mechanical products, textiles and apparel, transportation equipment, metal products, chemical products, food and agricultural products. Partners (2008)--Germany 12.8%, France 11.8%, Spain 6.5%, U.S. 6.3%, U.K. 5.3%. Imports (2009)--$408.6 billion f.o.b.: machinery and transport equipment, foodstuffs, ferrous and nonferrous metals, wool, cotton, energy products. Partners (2008)--Germany 16.0%, France 8.6%, China 6.3%, Netherlands 5.4%, Russia 4.3%, Spain 3.9%, Belgium 3.8%.
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), headed by the president of the council (prime minister). The president of the republic is elected for seven 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 proportional representation system. Under 2005 legislation, the Chamber of Deputies has 630 members (12 of whom are elected by Italians abroad). In addition to 315 elected members (six of whom are elected by Italians abroad), 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 five 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 and the volume and frequency of its decisions are not as extensive as those of the U.S. Supreme Court.
Until recently, there had been frequent government turnovers (more than 60 and counting) 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.
A series of center-left coalitions dominated Italy's political landscape between 1996 and 2001. In April 1996, national elections led to the victory of a center-left coalition (the Olive Tree) under the leadership of Romano Prodi. Prodi's government became the second-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. In April 2000, following a poor showing by his coalition in regional elections, D'Alema resigned. The succeeding center-left government, including most of the same parties, was headed by Giuliano Amato, who had previously served as Prime Minister in 1992-93.
National elections, held on May 13, 2001, returned Berlusconi to power at the head of the five-party center-right Freedom House coalition, comprising the prime minister's own party, Forza Italia, the National Alliance, the Northern League, the Christian Democratic Center, and the United Christian Democrats. This Berlusconi government served its entire term.
In national elections held April 9-10, 2006, Romano Prodi's center-left Union coalition won a narrow victory over Berlusconi's Freedom House coalition. The Union coalition included the Democratic Party (born of the November 2007 fusion of the Democrats of the Left and the Daisy Party), UDEUR (Union of Democrats for Europe), Rose in the Fist (made up by Italian Social Democrats and Italian Radical Party), Communist Renewal, the Italian Communist Party, Italy of Values, and the Greens.
In May 2006, the parliament elected Giorgio Napolitano as the Republic's President. President Napolitano formerly served as a lifetime senator, Minister of the Interior, and a member of the European Parliament as a member of center-left parties. President Napolitano's term ends in May 2013. The Senate, lower house, and regional representatives will vote to elect his successor.
In January 2008, the Prodi government fell when small coalition partner UDEUR withdrew support. In February, the President dissolved parliament and Silvio Berlusconi returned to power after defeating former Rome Mayor Walter Veltroni by a comfortable margin in elections on April 13-14, 2008. Berlusconi's winning coalition was composed of the People of Liberty (a union of Forza Italia and National Alliance), the Northern League, and the Movement for Autonomy. Berlusconi was sworn in as Prime Minister on May 8. Veltroni resigned as leader of the opposition in February 2009. His deputy, Dario Franceschini, was elected new Democratic Party (PD) leader until party primary elections held in October 2009, when Pierluigi Bersani was elected PD national secretary.
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 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. A new populist and free-market oriented movement, Forza Italia, gained wide support among moderate voters. 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. The May 2001 elections ushered into power a refashioned center-right coalition dominated by Berlusconi's party, Forza Italia. The April 2006 elections returned the center-left to power under the eight-party Union coalition, a successor to the Olive Tree.
In October 2007, the Democrats of the Left and the Daisy parties officially merged to form the Democratic Party. Veltroni was chosen as party leader and was the center-left's candidate in the April 2008 elections. Silvio Berlusconi launched an alliance between his Forza Italia party and Gianfranco Fini's National Alliance. The parties ran together under the People of Liberty symbol in April 2008. The election greatly simplified parliament, dramatically reducing the numbers of parties, and for the first time since World War II, leaving communist parties out of parliament. People of Liberty (37.4%) won the largest share of the vote and took power in coalition with a strengthened Northern League (8.3%) and the tiny Movement for Autonomy (1.1%). The Democratic Party scored 33.2% and ran in alliance with Italy of Values (4.4%), while the Union of the Center (5.6%) ran alone.
In March 2009, Forza Italia and National Alliance changed the People of Liberty identification from an alliance to a party. The new mass center-right party is Italy's largest party and one of the largest in Europe. Party leaders define the party as post-ideological, charismatic, and pragmatic. It is led by Berlusconi.
Italy has few natural resources. With much land unsuited for farming, Italy 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 in the Adriatic, 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 continues to grapple with budget deficits and high public debt--2.6% and 105.9% of GDP for 2008, respectively. Italy joined the European Monetary Union in 1998 by signing the Stability and Growth Pact, and as a condition of this Euro zone membership, Italy must keep its budget deficit beneath a 3% ceiling. The Italian Government has found it difficult to bring the budget deficit down to a level that would allow a rapid decrease of that debt. The worsening of the economic situation is expected to jeopardize this effort. The deficit is expected to grow well above the 3% ceiling in 2009 and 2010.
Italy's economic growth averaged only 0.8% in the period 2001-2008; 2008 GDP decreased 1.0%, largely due to the global economic crisis and its impact on exports and domestic demand. GDP contracted further as the Euro zone and world economies slowed; 2009 GDP decreased 5.0%.
Italy's closest trade ties are with the other countries of the European Union, with whom it conducts about 60.1% of its total trade (2007 data). Italy's largest European Union trade partners, in order of market share, are Germany (12.9%), France (11.4%), and the United Kingdom (5.8%). Italy continues to grapple with the effects of globalization, where certain countries (notably China) have eroded the Italian lower-end industrial product sector.
The Italian economy is also affected by a large underground economy--worth some 27% of Italy's GDP. This production is not subject, of course, to taxation and thus remains a source of lost revenue to the local and central government.
The United States and Italy cooperate closely on major economic issues, including within the G-8. With a large population and a high per capita income, Italy was the United States' twelfth-largest trading partner in 2008, with total bilateral trade of $51.6 billion comprised of exports to Italy totaling $15.5 billion and imports from Italy worth $36.1 billion. The U.S.'s $20.7 billion deficit with Italy in 2008 was slightly below the $20.9 billion deficit registered in 2007. Machinery and aircraft are becoming important U.S. exports to Italy. U.S. foreign direct investment in Italy at the end of 2007 exceeded $28.4 billion.
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, sugar beets, soybeans, meat, and dairy products, while the south specializes in 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 size being only seven hectares.
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), and the Council of Europe. It chaired the CSCE (the forerunner of the OSCE) in 1994, the EU from July to December 1990, January to June 1996, and July to December 2003, and the G-8 in 2001 and in 2009. Italy served a two-year term on the UN Security Council in 2007-2008.
Italy firmly supports the United Nations and its international security activities. Italy led the UN mission in Lebanon (UNIFIL) and has actively participated in and deployed troops in support of UN peacekeeping missions in Somalia, Mozambique, and Timor-Leste. It has provided critical support for NATO and EU operations in Afghanistan, Bosnia, Kosovo, Albania, Georgia, and Chad. Italy, under NATO's ISAF, maintains a Provincial Reconstruction Team in the western Afghanistan province of Herat, commands RC-West, and maintains a Carabinieri police training center. Italy supports reconstruction and development assistance to the Iraqi people through humanitarian workers and other officials, particularly in Dhi Qar Province, and is a leading contributor to the NATO Training Mission-Iraq, with approximately 100 military personnel and Carabinieri police trainers. Currently almost 9,000 Italian troops are deployed, including 2,100 in Kosovo, 2,350 in Lebanon as part of UNIFIL, and over 2,600 in Afghanistan.
The United States enjoys warm and friendly relations with Italy. Italy is a leading partner in counterterrorism efforts. The two are NATO allies and cooperate in the United Nations, in various regional organizations, and bilaterally for peace, prosperity, and security. Italy has worked closely with the United States and others on such issues as NATO and UN operations as well as on assistance to Russia and the New Independent States; Lebanon; the Middle East peace process; multilateral talks; Somalia and Mozambique peacekeeping; and combating drug trafficking, trafficking in women and children, and terrorism.