Situated in Southern Europe, Italy is regarded by many as the most romantic country in the world, with Venice a particular hot spot with tourists. The culture, the beauty and the vast array of food and drink has seen Italy grow in stature over the last 50 years, although the country does have a particularly volatile history. The country has also been recognized as the cradle of many European cultures, with the cauldron upon which much of the milestones and developments in human development traced back to the country. These include Pax Romana, the Renaissance and many other historical events where Italy has become the seat of its creation.
The country has become embroiled in a number of conflicts since the creation of Italy, with races such as the Romans and the Greeks having very strong influences over the country. Such greats as the mathematical genius Pythagoras, Leonardo da Vinci, Mussolini and Garibaldi are some of the powerful figures deeply entrenched in Italian history.
The often volatile nature of the country’s political scheme has held the country back until only recently, with mass migration from Southern Italy only diminishing in 1970 – it was estimated that over 26 million Italian emigrated to the likes of France, Belgium, Australia and the US for better employment opportunities.
The country is renowned for its art, cuisine and beautiful untouched countryside and while the political situation has historically been volatile it has calmed down over the last 20 years. These and many other positive factors are influencing the growing community of Expats living in Italy .
After years of under investment in both the economy and education, the Italian economy has improved of late and is now ranked as the 7th largest in the world. Italy is also among the Group of Eight industrialized countries, the OECD and the European Union. The country is still divided along old lines, with the North of the country showing a highly developed capitalist economy, dominated by a vast array of private companies. The South is less developed and tends to be dominated by low cost labor intensive manufacturing, which has enabled the country to become one of the largest exporters of manufactured goods.
The economy had also historically been dominated by the various Mafia families of the North and South, however their influence has greatly diminished as Italy continues to take a leading role in the development and structure of a single European economy. The prospects for the country have attracted a significant number of immigrants form places such as Albania, Morocco, Romania and China.
Prior to the adoption of the Euro in 1999, Italy had a period of extended fiscal restraint in order to correct some of the errors of the past, and meet the tight EU criteria for adopting the Euro. This was successfully achieved, and the economy is more stable than ever, with various sectors such as motor vehicles, chemicals, food, clothing and luxury vehicles playing prominent roles in the export driven economy of the country. Tourism is also a major industry, with the country attracting some 37 million visitors a year!
The unemployment figure in Italy is currently around 6.5% with economic growth expected to slow this year to 1.8%. When you consider the concerns regarding a potential worldwide economic slowdown, the forecast 1.8% growth rate is not as bad as it may seem. At some time, Italy was viewed as “the sick man of Europe” but since the early 2000s, it has maintained a per capita GDP at purchasing power parity equal to the European Union average.
As the Italian welfare system continues to creak under the influence of an ageing population, the tax regime is one of the harshest in Europe. Corporation tax is charged at a standard 33% and personal income tax varies between 23% and 43% (with VAT set at 20%).
Prospects in Italy
The country has often been held back by a volatile political environment which has seen the emergence of many radical ideals. Since adopting the Euro, and the financial constraints which went with that, the economy is now on a much firmer footing, as is the political arena.
However there continues to be much concern regarding the future liabilities of the Italian Welfare State, which has for some time being creaking under the weight of expectation. This has been offset somewhat by the recent rise in taxes due to the expanding economy, although the authorities seem unsure as to how the country may avert a pensions crisis on the future.
Italy is most definitely a growing country, with an economy which is unrecognizable from the shambles of the past. Unemployment and inflation are under control and the country’s export and tourism industries are among the leaders of the world. Another aspect of the Italian economy which has remained stable is its property market and is expected to further grow starting 2010.
While there is still work to be done, the country offers a great mix of beauty, culture, set against the background of an improving economic environment.
Key Facts on Italy:
Bordered by France, Switzerland and Austria
Food: The country is famous for its broad range of foods (with Pasta particularly popular) and fine wines
Temperature: Varies from North to South, from sub zero to 40c in the summer
Industries: Motor vehicles, clothes, luxury items, chemicals
Education: 9 years compulsory education with both state and private schooling popular
Health: Life expectancy 73 years
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