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Italy — Europe’s Powerhouse?

Is Italy a major component of the European engine?

May 15, 2001

Is Italy a major component of the European engine?

Long before there were Italian politics, Ferraris, Italian fashion or the mafia, other European countries have viewed Italy as a source for inspiration. Germans from Goethe to Heine liked to travel there and British writers from Shakespeare to Foster used Italy as a background for some of their finest works. What the country is less known for, however, is the fact that it is also is the seventh-largest economy in the world. Our new Globalist Factsheet takes a closer look.

Does Italy enjoy a strong position in the European Union?

As of 2000, Germany and Italy together account for roughly 50% of the euro-zone’s economic output.
(Financial Times)

Is democracy alive and well in Italy — or perhaps too well?

During its 1993 elections, Italy had 14 different political parties. By 1999, the number of competing parties had increased to at least 50. This time, Italians could choose from 47.
(Financial Times)

What distinguishes Italy from all other nations?

In 1997, Italy became the first nation ever to have more people over 60 years old than people under the age of 20.
(Washington Post)

And what are the elderly Italians up to?

As of mid-1999, more than half of the membership Italy’s trade unions is made up of pensioners. (Financial Times)

What is Italy’s biggest challenge?

“What Italy lacks now is not the strategy or the willingness to change, but the sense of urgency.”
(Mario Monti, EU commissioner from Italy,in October 1999)

What else is different about the Italian economy?

In 1999, criminal activity and other unmeasured economic activity equaled 27% of Italy’s GDP — a bigger proportion of national output than any other OECD country after Greece. (Economist)

So is it all gloom?

Since 1995, Italy has been the world’s leading privatiser, with average annual proceeds of $16 billion. (Economist)

Why haven’t more people appreciated Italy’s progress?

“Italy has completely changed the fiscal rules, and now our taxation system is one of the most modern in the world. But no one realized that because we did not reduce taxes.”
(Vicenzo Visco, Italian Treasury Minister, September 2000)

Has Italy’s economy profited from the euro?

Between 1990 and 1999, inflation in Italy has decreased from 6.1% to 1.6%.
(Dresdner Bank)

Was that performance expected?

‘PIGS’ was a 1996 term used to identify European countries — Portugal, Italy, Greece and Spain — that were unlikely to make it into monetary union.
(Wall Street Journal)

Any downsides after having joined?

During its first year in the euro, Italy’s share of world exports fell to 3.9% — its lowest level in a decade. (Financial Times)

What is the basic political outlook of the average Italian voter?

“When it comes to basic welfare provision, Italians are part-Catholic, part-Leninist.”
(Giuliano Amato, former Italian Prime Minister, on why Italians cannot agree on sensible reform, March 2000)

And finally, why did you run again, Mr. Berlusconi?

“I was driven by the knowledge that only I can turn this country around”. (Silvio Berlusconi, Italian Prime Minister, on why he ran for office a second time, in May 2001)