Country Profile: Italy

Italy

Italy is a Southern European country, currently with the continent's third largest economy.

  • Population: 61.261.254
  • Area: 301,340 km2
  • Capital: Rome
  • Growth rate 2011: 0.4 percent
  • Unemployment rate 2011: 8.4 percent
  • GDP per capita 2011: 22 650 Euro
  • Debt in percentage of GDP 2011:120.1%

 

Current economic and political situation:

  • Italy has a diversified industrial economy, which is divided into a developed industrial north, dominated by private companies, and a less-developed, welfare-dependent, agricultural south, with high unemployment.
  • The Italian economy is driven in large part by the manufacture of high-quality consumer goods produced by small and medium-sized enterprises, many of them family owned. Italy also has a sizable underground economy, which by some estimates accounts for as much as 15% of GDP.
  • These activities are most common within the agriculture, construction, and service sectors. Italy is the third-largest economy in the euro-zone, but exceptionally high public debt burdens and structural impediments to growth have rendered it vulnerable to scrutiny by financial markets.
  • Public debt has increased steadily since 2007, reaching 120% of GDP in 2011, and borrowing costs on sovereign government debt have risen to record levels. In 2011 the government passed a series of austerity packages to balance its budget by 2013 and decrease its public debt burden. These measures included a hike in the value-added tax, pension reforms, and cuts to public administration.
  • Exactly the administration has a very big budget. A study from the independent Italian Think Thank “Vision” in January this year showed that for instance that the Italian parliament is the most expensive in the whole European Union.
  • Indeed it is not only the most expensive one but it costs more than the parliaments in Berlin, London, Paris and Madrid together. The expenses for the two chambers in the parliament annually cost 1,6 billion Euro. Until last year the restaurant in the parliament has special very low prices for parliamentarians, a free hairdresser in addition to free admission to some football stadiums and operas.
  • The individual parliamentarian has a monthly salary of 16 000 Euro which is the highest in the European Union for national parliamentarians.
  • The reforms have begun even in parliament. Now the parliamentarians have to document half of their monthly expenses allowance of 3700 Euro prior to this the parliamentarians often had hired their relatives or cashed in the amount themselves.

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