Of all European countries, Italy is perhaps the hardest to classify. It is a modern, industrialized nation. It is the harbinger of style, its designers leading the way with each season's fashions. But it is also, to an equal degree, a Mediterranean country, with all that that implies. Agricultural land covers much of the country, a lot of it, especially in the south, still owned under almost feudal conditions. In towns and villages all over the country, life grinds to a halt in the middle of the day for a siesta, and is strongly family-oriented, with an emphasis on the traditions and rituals of the Catholic Church which, notwithstanding a growing scepticism among the country's youth, still dominates people's lives here to an immediately obvious degree.
Italy has a diversified industrial economy with approximately the same total and per capita output as France and the UK. This capitalistic economy remains divided into a developed industrial north, dominated by private companies, and a less developed agricultural south, with more than 20% unemployment. Most raw materials needed by industry and more than 75% of energy requirements are imported.
For several years Italy has adopted budgets compliant with the requirements of the European Monetary Union (EMU); representatives of government, labor, and employers also agreed to an update of the 1993 "social pact," which has been widely credited with having brought Italy's inflation into conformity with EMU requirements. Growth was 1.3% in 1999 and should edge up to 2.6% in 2000, led by investment and exports.
