ITALY

Erika L. LaMarch

International Business

Immaculata University

Size

Background

• 2000-1000 B.C. Indo-European Migration

• 900-300 B.C. Etruscan Civilization

• 300 B.C.-500 A.D. Roman Empire

• 800-1800 Italian City States

• 1800-1815 Napoléon unifies Italy

• 1815-1870 Disbanded (Uprisings, War, Unification)

• 1870 Constitutional Monarchy

WWI

• Italy Enters in 1915 with Allies • 1919 Under Mussolini Fascist Party Forms• 1922 Fascist Party Successfully Rises to Power• 1936 Rome-Berlin Axis• 1943 Loose War• 1945 Mussolini Executed• 1947 Peace Treaty

– Return Ethiopian, Grecian, French, &Yugoslavian Territory

– Join NATO& EU

GovernmentHistorical

• 1970’s Terrorist Pressure from Red Brigades• 1972-1992 Andreotti Prime Minister Off& On• 1996-1998 Prodi Prime Minister• May 1999 Ciampi is President• Aviano Air Base Participates in Kosovo&

Yugoslavia• June 2001 Berlusconi is Prime Minister• 2006 Prodi Prime Minister

– Afghanistan Participation Resignation and Reinstatement

Politics

President

Prime Minister

Cabinet

Parliament Judicial

Chamber of Deputies Senate

20 Regions

94 Provinces

Parties

Left of Centre Unione– DS– DL– PRC– PDCI– Udeur– I Verdi– Rosa nel Pugno

Casa della Liberta– FI– AN– UDC– Lega Nord

Government

102

103

104

105

106

107

108

2002 2004 2006

GenGov't Deb(% GDP)

-6

-5

-4

-3

-2

-1

0

2002 2004 2006

GenGov't Bal(% GDP)

Crime

• 27% of GDP• Corruption Index: 5.3• 95% access to drugs• 146 murders• 29,063 assaults• 243,890 car thefts• 60.3/100,000• 2,205,780 crime• Examples

– 2001 Berlusconi– 2002 Andreotti– 2003 Parmalat– 2006 Provenzano

Legal System

• Civil Law– Roman– Napoleonic

• Minister of Justice– Clemente Mastella

Finance

• Minister of Economy and Finance– Tommaso Padoa-Schioppa

• Governor of Bank of Italy– Mario Draghi

• Euro– Introduced January 1, 1999– European Central Bank– EMU

23

24

25

26

27

28

29

30

31

2002 2004 2006

BillionsofForeignExchangeReserves

Euro Value

Euro Value

0

0.2

0.4

0.6

0.8

1

1.2

1.4

2002 2003 2004 2005 2006

US:E AVG

Economy

• Minister of Social Welfare: Paolo Ferrero

• Minister of Productive Activities and Economic Development: Pierluigi Bersani

• Minister of Public Works and Innovation: Luigi Nicolais

• Failed State Index: Stable

• Economic Freedom Index: 2.65

• Low Interest

Inflation

• Low– Consumer Prices: Up

1.8%– Producer Prices: Up

3.9%– Industrial Prices: Up

1.3%

• Expectations– Consistent with EU– Low Oil Prices– Strong Euro 0

0.5

1

1.5

2

2.5

3

2002 2004 2006

ConsumerInflation(%)

GDP

• Eurotrade: France& UK• GDP/PPP/Per Capita

2005: $28,706

2004: $28,781.68

1950: $3,425• GNI: 1,120,000,000,000 • Components

17%

17%

14% 14%

38%

PrivateConsumptionPublicConsumptionGross FixedInvestmentExports

Imports

0

0.5

1

1.5

2

2002 2004 2006

GDP/PPP in Trillions

Real GDP Growth (%)

Labor

• Minister of Labor and Employment: Cesare Damiani

• Minister of Equal Opportunity: Barbara Pollastrini

• Human Development: 934• Unions• 2006 Wages: Up 3.3% • Pension System• Unemployed: 9.2%

– 1992– South– Women and Teens

6% 2%

23%

69%

Services

Industry, Commerce

Construction

Agriculture, Forestry,Fishing

Resources

• 28% Arable Land• Coal• Mercury• Zinc• Potash• Marble• Barite• Asbestos

• Pumice• Fluorospar• Feldspar• Pyrite (Sulfur)• Natural Gas• Crude Oil Reserves• Fish• Wheat• Rice

Industries

• Tourism• Precision Machinery• Iron and Steel• Chemicals• Food Processing• Textiles• Motor Vehicles• Fashion Clothing and Footwear• Ceramics• Pharmaceuticals• Electric Goods

Agriculture

South• Citrus Fruits• Grapes• Vegetables

– Potatoes– Olives

• Grain– Durum

• Fish• Wine

North• Sugar Beets• Soybeans• Grain

– Wheat– Rice

• Beef• Dairy products

Trade

• Trade Deficit: 4.3% GDP• EMU Requirement• Current Account Balance Deficit: $27.7 Billion• Trade Surplus: $100 Million• Public Debt: 108% GDP

0

200

400

600

2002 2004 2006

ExportsinBillions

ImportsinBillions

-45

-40

-35

-30

-25

-20

-15

-10

-5

0

2002 2003 2004 2005 2006

CurrentAccountBalance inBillions

Exports (2005)

$372.8 Billion• Engineering products• Textiles and Clothing $47.9

Billion• Production Machinery $107.5

Billion• Motor Vehicles• Transport equipment $40 Billion• Chemicals $37.5 Billion• Food • Beverages and tobacco• Minerals• Nonferrous Metals• Cotton

ProductionMachineryTransportEquiptmentChemicals

Textiles andClothingNonferrousMetals

Imports (2005)

$372.7 Billion• Engineering products• Textiles and Clothing• Production Machinery $73.9

Billion • Motor Vehicles• Transport equipment $51.1

Billion• Chemicals $50.8 Billion• Food $24.9 Billion• Beverages and tobacco• Minerals• Nonferrous Metals • Energy Products $51.1 Billion• Bananas $346 Million

TransportEquipment

Chemicals

NonferrousMetals

EnergyProducts

Trading Partners(2004)

• Germany• France• U.S.• Spain• UK• Switzerland• Netherlands• China

Germany

UK

Netherlands

China

Belgium

Imports

Exports

Germany

France

U.S.

Spain

Culture

• Minister of Youth and Sport: Giovanna Melandri• Minister of Cultural Heritage: Francesco Rutelli• Minister of Communication: Paolo Gentiloni Silveri• Minister of Family Policy: Rosy Bindi• Minister of Health: Livia Turco• Language: Italian• Religion: 85% Roman Catholic• Minorities: German, Slovene, Albanian, Greek,

Ladino, French• GINI index: 36• Child Poverty index: 20.5

Population

• Annual Growth Rate: 0.28%• Low Fertility• Population Density:

– 5th Largest in Europe– 490 people per square mile

57.8

57.9

58

58.1

2002 2003 2004 2005 2006

Population in Billions

Education

• Minister of Education: Giuseppe Fioroni• Minister of Universities and Research: Fabio Mussi• Literacy: 99% (2003)• 9 Years of School Required• 7.2 Years of School (<15 Year Olds)• 4.1% GDP Spent on Education (2000-2002)• Elementary Starting Salary: $19,188 (1999)• Dislike School: 38% (2000)• Disorderly: 46% (2000)

Fashion

• Fashion=Success– Quality suits– Quality accessories preferably leather– Pin-striped/one color shirts with an Italian

designer tie– No slacks– Women should dress quiet, expensive, and

elegant

Etiquette

• Time is not money• Only executives can be late for appointments• Business meetings and social events

– Simultaneous talking– Oldest highest ranked person gets special attention– Don’t ask a stranger about their job

• Gifts– Are required when your invited into the home

• Gift wrapped chocolates or pastries• Flowers in even numbers only

– Only expensive vintage wine

Etiquette

• Never use the number 17• Business Cards

– White with black print– Business credentials for formal relationships– Personal information for less formal relationships

• Conversation– No WWII– Culture– Art– Food– Wine– Family– Films

Hofstede

Country U.S. Italy

Power Distance 40 50

Individualism 91 76

Uncertainty Avoidance 46 75

Masculinity 62 70

Membership

• EU

• G-8

• OECD

• EMU

• OSCE

• NATO

• UN

• GATT/WTO

Taxes

•Corporate income tax: 7.6% •Goods and service tax: 26.9% •Personal income tax: 25.5% •Property tax: 4.3% •Tax on Savings: 20%Contribution by Poorest 30%: 6.7% Contribution by Richest 30%: 62.3% Total Tax Single Worker: 46.2% Total Taxation as % of GDP: 42 % of GDP

Immigration

• South East Europe

• North Africa

• Refugees– 68,300 (1990-1999)– 271,500 (2000)

• U.S. Visa

References• (2007, February 26). Country Briefings Italy. Retrieved April 29, 2007, from

Economist.com Web site: http://www.economist.com/countries/Italy/profile.cfm?folder=Profile%2DEconomic%20Structure

• (2007). Europe>Italy. Retrieved April 29, 2007, from NationMaster.com Web site: http://www.nationmaster.com/country/it-italy/agr-agriculture

• (2007) Italy: History, Geography, Government, Culture. Retrieved April 24, 2007, from infoplease all the knowledge you need Web site: http://www.infoplease.com/ipa/A0107658.html

• (2007) Italian Republic. Retrieved April 24, 2007, from Export.gov Web site: http://www.export.gov/nonuscompanies/index.asp

• (2007) Italy Definition and Much More from Answers.com. Retrieved April 24, 2007, from Answers.com Web site: http://www.answers.com/topic/italy

• (2007) English Website. Retrieved January 24, 2007, from Istat.it Web site: http://www.istat.it/english/

• (2006) Introduction. Retrieved April 27, 2007, from Cyborlink.com Web site: http://www.cyborlink.cm/besite/italy.htm

• Hofstede, Geert (2006). Hofstede’s Dimension of Culture Scales. Retrieved April 27, 2007, from Cyborlnk.com Web site: http://spectrum.troy.edu/~vorism/hofstede.htm