Economy of Italy

The Italy is an industrialized country with the diversified economy, whose Gross domestic product, total or per capita, compares with those country like the France or the Great Britain.

The Italian economy is characterized by important regional contrasts, between north (Plaine of Po) very developed, industrialized, and very dynamics, the center, around Rome dominated by the tertiary sector and the political offices of the capital, and the south, the the Mezzogiorno , more rural and which suffers from a high unemployment rate (of about a 20%) and the presence of the Mafia. This imbalance perdure in spite of the many policies followed in favor of the development of the the Mezzogiorno . The other characteristic is the importance of the small and medium-size companies, in particular in the North-East (Venezia), which strongly contribute to the notoriety of Italian know-how in the world. To note however that certain sectors are very concentrated, such that of the car quasi monopolized by FIAT.

It is an economy very dependant on the imports for its provisioning of raw materials and energy (more than 75% of energy is imported, the country having some layers of Natural gas and resources Hydro-électricité, but having given up the nuclear energy completely). In 2006, it is the 8th economy, behind that of the France.

During last decades, the country continued a strict fiscal policy with an aim of answering the criteria economic and monetary of the European Union, which allowed him, grace also to limited interest rates and a lower Inflation, to take part in the Euro as of its creation in 1999.

More recently, the economic performances of Italy took some delay compared to its european partners. That led the governments of Silvio Berlusconi then of Romano Prodi has many short-term reforms in order to improve competitiveness of the country and its longer-term growth. However the implementation of very desirable reforms from the point of view of the economists, like the lightening of the Taxes and social security deduction, the easing of the Job market and reforms it expensive retirement scheme, advances too slowly as well because of stagnation of the economy as of the opposition of the Syndicat S.

Weaknesses of the Italian economy

They are mainly due to an economic model which is not adapted any more to the worldwide market. In particular the intermediate size of the undertaken Italian is from now on too small, while the industrial districts cross them a major crisis.

Indeed, 40 to 50% of paid in Italian industry are it in firms of less than 50 employees, against 20-25% in France, with a median number of paid by company of 8 (13 in France). However the small size of these companies, far from supporting the economy, constitutes on the contrary a brake since it prevents them from conquering the overseas markets. In their center, the economies of scale and the productivity by employee are less and they cannot thus invest sufficiently because of their difficulties of financing. Moreover, the family Capitalisme still occupies a great place in Italy. However this one is characterized by a strong mistrust and a strong opacity with respect to the institutional investors what delays the necessary modernization of these SME which is not thus enough any more competitive to face international competition.

The Italian model of production by industrial districts, formerly envied by many countries, is today in crisis. The force of these basins of mono-activity rested on a phenomenon of synergy between the companies. However their structure in network from now on is put at evil by a growing number of delocalizations which break these existing traditional bonds between them. Moreover, this organization leads to a division of the innovations which takes precedence in fact over research. It is not then thus not surprising that employment is in reduction in these districts. The great groups themselves have important problems. During these last years of many companies were repurchased by foreign groups (example of the repurchase of the steelmaker Lucchini by Russian Severstal) or even know a strong foreign competition in Italy (establishment of Carrefour and Auchan) what lets fear that the country becomes, as affirms it the sociologist Luciano Gallino “a kind of colony subjected to the economic requirements, social and policies of other countries”.

Tourism

August 1st

Companies

See too

List of Italian companies

External bonds

economic study of Italy, OECD, 2007

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