COUNTRY PROFILES

italy

select specific area Introduction Security of supply Structure of the energy sector and Main Energy market actors National energy policy strategy and priorities

Italy – Introduction

•Economic and socio-political issues
The territory of the Country stretches over an area of 301,338 km2, the forest surface is about 68,474 km2 (22.7 % of total surface) and the total coastline is 7,375 km. Actually the total population is around 59 millions of inhabitants. During the last decade the population has passed from 56.72 millions in the year 1990 to 58.06 million in 2004, reaching a housing density of 192 inhabitants/m2 with an increase of 2.1 %.

Italy has a diversified industrial economy with roughly the same total and per capita output as France and the UK. The Gross Domestic Product (GDP) generated by the Italian economy in the year 2003 was 1552 billion US$, with a per capita output of 26,800 US$. In comparison with 2002, GDP grew by 0.5% in real terms. The inflation rate was kept at 2.3%. By sectors, according to data in 2001, 2.4% of GDP was generated by agriculture, 30% manufacturing industry and the remaining part of 67.6% by the services sector. For the year of 2004 Initial forecasts have pegged Italy's real GDP growth at 0.8%.

This capitalistic economy remains divided into a developed industrial north, dominated by private companies, and a less developed, welfare-dependent agricultural south, with 20% unemployment. Most raw materials needed by industry are imported. Over the past decade, Italy has pursued a tight fiscal policy in order to meet the requirements of the Economic and Monetary Unions and has benefited from lower interest and inflation rates. The current government has enacted numerous short-term reforms aimed at improving competitiveness and long-term growth. Italy has moved slowly, however, on implementing needed structural reforms, such as lightening the high tax burden and overhauling Italy's rigid labor market and over-generous pension system, because of the current economic slowdown and opposition from labor unions.

• Relations with the EU (Bilateral & Multilateral Agreements)
Italy was a charter member of NATO and the European Economic Community (EEC). It has been at the forefront of European economic and political unification, joining the European Monetary Union in 1999.