Despite regional divisions and a series of unstable governments, Italy remains an important player in Europe
Italy is dominated by mountains. The Alps loom over the north of the country and merge with the Apennine Mountains, which run down the centre. Mountains also make up much of the Italian islands of Sicily and Sardinia. Overall, more than one-third of Italy's territory is covered by ranges higher than 700 metres.
The difficult terrain is one reason why the country has been regionally divided. Italy was united as one country only in 1871, at which point only 3% of the population spoke Italian. Since then there has been a steady process of integration, but strong regional identities persist.
For much of the 20th century, Italy's population grew rapidly, and with limited prospects of work at home, millions of Italians emigrated: even as late as 1968–70 net emigration was over 250,000. Now the position is reversed. The fertility rate, at 1.3 children per woman, is among the lowest in the world.
Italy has become a country of net immigration: currently it has about two million immigrants, most of whom have come from outside the EU, chiefly from Morocco, former Yugoslavia, Tunisia, and Albania.
Thin soils and steep terrain have always made agriculture difficult, and as a result Italy has been a net importer of most kinds of food, except for fruit and vegetables. It is also poorly endowed with other natural resources: it has no coal and has to import 75% of its energy needs.
In economic terms, the country's great strength has been in manufacturing which accounts for around one-quarter of GDP. It does have some large companies, notably Fiat, Pirelli, and also Fininvest which is controlled by the family of prime minister Silvio Berlusconi. But manufacturing is dominated by networks of thousands of small firms, chiefly in clothing, furniture, kitchen equipment, and ‘white goods’ such as refrigerators and cookers. These often cluster together regionally: wool textiles in Prato, for example, shoes in Verona, spectacles in Belluno.
These small and medium-sized enterprises have been the engine for economic growth. But in recent years they have not been able to expand sufficiently and Italy has been falling behind other euro-based economies. Moreover, much of this activity has, been in the underground economy which is thought to control one-quarter of GDP.
Production is concentrated in the north. Here manufacturing accounts for 30% of value-added, compared with 13% in the south. Indeed, the GDP of the south is only 70% of the Italian average.
Many Italian men still live with their mothers
There are also striking regional differences in unemployment—3% in the north but 11% or more in the south. The impact of unemployment is also cushioned by the extended family which remains stronger in Italy than in most other industrial countries. Around two-thirds of unmarried men under 30 still live with their mothers. And when they marry they do not move very far.
Tourism also makes an important economic contribution, with 41 million visitors per year.