Wayzata World Factbook 1995/World Factbook - 1995 Edition - Wayzata Technology (1995).iso/mac/text/Build/orig BACKGR/BNOT0055.TXT

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National Trade Data Bank
ITEM ID     : ST BNOTES ITALY
DATE        : Oct 28, 1994

AGENCY      : U.S. DEPARTMENT OF STATE
PROGRAM     : BACKGROUND NOTES
TITLE       : Background Notes - ITALY

Source key      : ST
Program key     : ST BNOTES
Update sched.   : Occasionally
Data type       : TEXT
End year        : 1994
Date of record  : 19941018
Keywords 3      :
Keywords 3      : | ITALY

BACKGROUND NOTES:  ITALY
PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS
U.S. DEPARTMENT OF STATE

AUGUST 1994
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 (mid-1992):  57.2 million.  Annual growth rate
(1992):  0.3%.

Ethnic groups:  Primarily Italian, but 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 (1992)--7.4/1,000 live
births.  Life expectancy--male 73 yrs; female 80 yrs.

Work force (1993):  22.3 million; unemployment 11%.
Agriculture--7%.  Industry and commerce--33%.  Services--
60%.


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, 326-member
Senate.  Judicial--independent constitutional court and
lower magistracy.

Subdivisions:  94 provinces, 20 regions.

Political parties:  Forza Italia, Northern League,
National Alliance, Democratic Party of the Left, Italian
People's Party, Christian Democratic Center, Socialist,
La Rete, Communist Renewal, Social Democratic,
Republican, Liberal, Greens.

Suffrage:  Universal over 18.

Defense (1993):  2.1% of GDP.

Flag:  Three vertical bands--green, white, and red.


Economy
GDP (1993):  $992.4 billion.

Per capita income (1993):  $17,368.

GDP growth (1993):  -0.7%.

Natural resources:  Fish, natural gas.

Agriculture:  Products--wheat, rice, grapes, olives,
citrus fruits.

Industry:  Types--automobiles, machinery, chemicals,
textiles, shoes.

Trade (1993):  Exports--$168.9 billion; partners--EU
53.1%, U.S. 7.8%, OPEC 4.9%; mechanical products,
textiles and apparel, transportation equipment, metal
products, chemical products, food and agricultural
products, energy products.  Imports--$148.1 billion;
partners--EU 55.3%, U.S. 5.3%, OPEC 6.5%; machinery and
transport equipment, foodstuffs, ferrous and nonferrous
metals, wool, cotton, energy products.
Exchange rate (1993 avg.):  1,572 lire=U.S. $1.



PEOPLE AND 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-speakers in Bolzano Province and
Slovenes around Trieste.  Other groups comprise small
communities of Albanian, Greek, Ladino, and French
origin.  Although Roman Catholicism is the majority
religion--99% of the people 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 was unified under the
Roman Republic; the Empire extended Roman rule over the
neighboring islands.  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.

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
two 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" (parliaments).  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 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 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
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, volume, and frequency of
decisions are not as extensive as those of the U.S.
Supreme Court.

Principal Government Officials
President--Oscar Luigi Scalfaro
Prime Minister--Silvio Berlusconi
Foreign Minister--Antonio Martino
Ambassador to the United States--Boris Biancheri

Italy maintains an embassy in the United States at 1601
Fuller Street NW, Washington, DC 20009 (tel. 202-328-
5500).


POLITICAL CONDITIONS
There have been frequent government turnovers since 1945.
However, with the Christian Democratic (DC) party as the
majority party, there had been continuity and comparative
stability in Italy's political situation.  Italian
governments consistently formed around the DC, which
governed either in coalition with other parties or alone
through 1994.  From 1992 to 1994, 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 from a proportional to majoritarian electoral
system, stiff campaign reforms, and abolishment of some
ministries.

Major political parties that were beset by scandal and
loss of voter confidence underwent far-reaching changes.
New political forces and new alignments of political
power emerged.  In March 1994 elections, the "Freedom
Alliance" of the new Forza Italia party, the federalist
Northern League, and the National Alliance (which traces
its roots to fascism) won an absolute majority in the
Chamber and a plurality in the Senate.  Prime Minister
Silvio Berlusconi formed a coalition government based on
the Freedom Alliance, small centrist parties, and
independents.  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 Berlusconi government pro-gram emphasizes economic
reforms and continuity in Italy's foreign policy.  It
aims to continue former Prime Minister Ciampi's
privatization program, reduce the debt and deficit,
reform the fiscal system, and improve economic
competitiveness.  Further institutional reforms--
additional changes in the electoral system and possible
direct election of the president and/or prime minister--
are issues of ongoing political interest; so too is the
possibility of reducing central government control while
introducing greater federalism.

Political Parties
Italy's dramatic self-renewal transformed the political
landscape between 1992 and 1994.  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 political ground rules.

Party changes were sweeping.  The Christian Democratic
party dissolved; the Pact for Italy, the Italian People's
Party, and the Christian Democratic Center emerged.
Other major parties, such as the Socialists, saw support
plummet.  New parties such as Forza Italia, led by media
magnate Silvio Berlusconi, emerged; others, such as the
National Alliance, formed by the Italian Social Movement
(MSI) and conservative former Christian Democrats, picked
up strength.

Since Italy has slightly differing electoral systems in
Senate and Chamber races for the 25% of seats allotted on
a proportional basis (in the Chamber based on individual
parties but in the Senate based on multi-party
coalitions), it is difficult to judge increase or decline
of party preferences compared to earlier elections.
Moreover, because of considerable political realignments,
some parties do not bear resemblance to their earlier
iterations.

The largest parties in the Chamber are:  Forza Italia
(21%); Democratic Party of the Left--moderate successor
to the Italian Communist Party--(20.4%); National
Alliance/Italian Social Movement (13.5%); Italian
People's Party--primary successor to the DC--(11.1%);
Northern League (8.4%); and Communist Renewal--hard-line
successor to the Italian Communist Party--(6%).  In the
Senate, the largest groups were:  Forza Italia-Northern
League (19.9%); Forza Italia-National Alliance (13.7%);
Progressive Alliance--PDS and others--(32.9%); Pact for
Italy (16.7%); National Alliance/Italian Social Movement
(6.3%).  Several other smaller parties are also active.
In municipal and regional elections, such parties,
including the Greens and La Rete (the Network), drew
well.


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, and,
with a total GDP of more than $992 billion in 1993, it
ranks as the world's fifth-largest industrial democracy.
Italy belongs to the Group of Seven (G-7) 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, 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 Adriatic, have grown in recent years and
constitute the country's most important mineral
resources.  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, electrical goods, and fashion and
clothing.

In 1993, Italy, caught in Europe's economic doldrums,
experienced 0.7% negative growth, one of the largest
drops in the postwar period.  Investment, consumption,
and industrial production fell; the services sector grew
modestly.  Italian economic performance is expected to
improve modestly in 1994 and 1995, with real growth
projected at 1.4% and 1.9%, respectively, based on strong
exports and increased domestic demand.

The 1992 floating of the lira led to a 1993 export boom.
Italy posted a 1993 trade surplus of $32.4 billion,
compared to $3 billion in 1992; and a current account
surplus of $9.5 billion, compared to a 1992 deficit of
$27.9 billion.  Continued competitive lira exchange rates
should assist further export-led growth.  Government
economic reforms, sluggish domestic demand, and a
landmark 1993 wage accord all helped keep inflation in
check despite the lira's 1992 depreciation.  Inflation
was at 4.2% in 1993 and should remain moderate, at 4%-5%,
in 1994-95.

In coordination with the EU's planning for an eventual
single market, Italy seeks to align its economic policies
with those of the other major continental economies and
to privatize large state-owned holding companies in a
number of sectors.  Italy faces several economic and
political hurdles in achieving both goals while
maintaining social cohesion.  Moreover, under terms of
the Maastricht Treaty, a convergence target of 3% has
been set for public sector deficit as percentage of GDP--
far below Italy's present rate.  Also, Italy's public
debt/GDP ratio does not put it realistically within reach
of the Treaty' s target of 60%.

Italian Government efforts to reduce the relative
sustained size of the public sector budget deficit have
met some success.  The public sector deficit dropped to
about 10% of GDP in 1993 and should decline slowly to
9.6% of GDP in 1994 and 9% of GDP in 1995, assuming
continued reform.  The gross public debt fell in 1993 but
still remains greater than 100% of GDP.   These
deficit/GDP and debt/GDP ratios remain well above the
rest of the group of major industrial economies and
complicate efforts to coordinate Italy's economic
policies with those of its major European partners.

Italy's closest trade ties are with the other countries
of the European Union, with whom it conducts about 54% of
its total trade.  Italy's largest EU trade partners, in
order of market share, are Germany (19.4%), France
(13.6%), the United Kingdom (6.4%), and the Netherlands
(5.6%).

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-7, which Italy
chaired in 1994.  With a large population and a high per
capita income, Italy is one of the United States' most
important trading partners.  In 1993, the United States
was the fifth-largest single foreign supplier of the
Italian market (with a market share of 5.3%) and the
largest outside the EU.  Total trade between the United
States and Italy exceeded $21 billion in 1993; the U.S.
ran more than a $5-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 will expand further.  During 1993,
the United States imported $13 billion in Italian goods
while exporting $7.8 billion in U.S. goods to Italy.
U.S. foreign direct investment in Italy exceeds $14
billion; Italian investment in the U.S. is growing fast.

Labor
A rigid labor market and protective legislation for
employed workers have compounded Italy's major problem of
unemployment, which held at about 11.3% in 1993--with
most job losses occurring in the industrial sector.  For
structural economic reasons, unemployment should continue
to be a problem even with economic recovery and modest
wage gains following the landmark July 1993 labor accord.
Although skilled labor is in short supply in some
categories, inefficient use of labor, structural
unemployment, and underemployment persist, as does labor
unreported for tax purposes.  Adult and youth
unemployment are more acute in southern than in northern
Italy.

Official estimates place the unionization rate of the
labor force at 15%; this does not reflect union
statistics, since as it accounts only for dues-paying,
active workers, omitting retiree/pensioner figures.  Most
Italian unions are grouped in three confederations, each
of which has had traditional ties with a particular
political party.  With the collapse and near
disappearance of the traditional ruling parties, these
informal ties have ended, and the confederations now
emphasize their autonomy from political parties.  The
three major confederations are the Italian Confederation
of Labor Unions (CISL), the Italian General Confederation
of Labor (CGIL), and the Union of Italian Labor (UIL).
The approximate labor share for the three confederations
is:  CGIL, 42%; CISL, 37%; and UIL, 20%.

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, sugar beets, soybeans, meat,
and dairy products, while the southern section
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 (1.6 million)
employed in farming.  Most farms are small, with the
average farm only seven hectares.


FOREIGN RELATIONS
Italy is a founding member of the European Union--before
the Maastricht Treaty, the European Community.  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 (GATT); the Conference on Security
and Cooperation in Europe (CSCE), the Western European
Union (WEU); and the Council of Europe.  It chaired the
WEU in 1993 and has chaired the CSCE and the G-7 in 1994.

Italy firmly supports the United Nations and its
international security activities.  Italy actively
participated in and deployed troops in support of UN
peace-keeping missions in Somalia, Mozambique, and
Cambodia; Italian troops provided logistical and
humanitarian assistance to Albania from 1991 to 1993.  It
provides critical support for NATO and UN operations in
Bosnia.

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.


DEFENSE
A strong NATO ally, Italy occupies an important strategic
position in the Mediterranean, critical to regional
security and for enhancing stability in the Balkans,
North Africa, and the Middle East.  To meet challenges of
the post-Cold War era, Italy has proposed a "New Defense
Model" that calls for the creation of more mobile and
highly trained units staffed by career professionals.
The Italian military is subordinate to civilian
authority, which is vested in the Ministry of Defense.
Under the authority of the Defense Minister, the armed
forces have also been used in Italy for emergency relief
and combating organized crime.


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 operation in Bosnia; sanctions
against the former Yugoslavia; assistance to Russia and
the New Independent States (NIS); Middle East peace
process multilateral talks; Somalia and Mozambique peace-
keeping; and combating drug trafficking and terrorism.

Under long-standing bilateral agreements flowing from
NATO membership, Italy hosts important U.S.  military
forces at Vincenza and Livorno (Army); Aviano (Air
Force); and Sigonella, La Maddalena, 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 trans-Atlantic 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 peace-keeping
policies.


Principal U.S. Officials
Ambassador--Reginald Bartholomew
Deputy Chief of Mission--James Creagan
Minister-Counselor for Political Affairs--Harry L.
Coburn
Minister-Counselor for Economic Affairs--Robert J. Smolik
Minister-Counselor for Public Affairs--Cynthia J. Miller
Minister-Counselor for Commercial Affairs--Keith Bovetti
Minister-Counselor for Agricultural Affairs--Frank A.
Padovano
Treasury Attache--Gay Hoar
Defense Attache--Capt.  Philip Bozzelli, USN

Consular Posts
Consul General, Florence--Sue Patterson
Consul General, Milan--Richard Shinnick
Consul General, Naples--Clarke N. Ellis

The U.S. embassy in Italy is located at Via Veneto 119,
Rome (tel. [phone]).



TRAVEL NOTES

Clothing:  Woolens and sweaters are practical in winter;
cottons are recommended for the hot summers.

Currency:  Non-residents are allowed to take out or bring
in to the country Italian and foreign banknotes and
bearer and personal checks up to 20 million lire.  In
cases of negotiable instruments exceeding the 20-million-
lira limit, non-residents should request an import
certificate (Form V-2) from the customs authorities at
the port of entry.

Health:  Medical facilities are available in cities.  No
special immunizations are necessary.  Tapwater is safe.
Meat and shellfish should be well-cooked.

Telecommunications:  Telephone and telegraph connections
within Italy and to international points are good.  Rome
is six standard time zones ahead of eastern standard
time.

Transportation:  Many major international airlines have
service to Rome and Milan, and there is daily jet service
to the United States.  Public transportation is modern
and efficient; metered taxis also are available at
stands.

Visas:  No Italian visa is required of American citizens
visiting Italy temporarily for tourism or business trips.
Persons planning to travel to Italy for work or other
purposes should inquire about their visa status in
advance at an Italian embassy or consulate before
traveling to Italy.




Published by the United States Department of State  --
Bureau of Public Affairs  --  Office of Public
Communication  --  Washington, DC  --  August 1994  --
Managing Editor:  Peter A. Knecht  --  Editor:  Marilyn
J. Bremner

Department of State Publication 9542  --  Background
Notes Series

For sale by the Superintendent of Documents, U.S.
Government Printing Office, Washington, DC  20402.