Italy has Europe's fourth-largest economy (after the UK, Germany, and France), but is around 12th out of the 15 EU countries in terms of gross domestic product (GDP) per head. The country had an estimated per capita GDP in 2002 of US$24,700, compared with US$29,360 in the UK, US$29,210 in Germany, US$27,890 in France and US$37,600 in the US (figures from the Economist Intelligence Unit). However, Italy has huge extremes of wealth and poverty, and there's a vast difference in incomes between the rich northern region and the poor southern Mezzogiorno â€?an imbalance that vast injections of central government and EU cash have done little to alleviate. Not surprisingly, given Italy's woeful fiscal mismanagement, the rules to allow Italy entry to the euro were fudged (Italy had a public debt well above the level specified in the Maastricht Treaty) and it's one of the weakest links in the euro group of 12 countries. However, it's hoped that the discipline imposed by the euro (and the possibility of Italy being thrown out if it doesn't stick to the rules) will knock the Italian financial system into shape. Italy was badly hit by the recession in the early 1990s and, although the economy has recovered, unemployment remains relatively high, the cost of living has increased in recent years and per capita personal debt has risen considerably.
The percentage of the working population engaged in agriculture is around 7 per cent, compared to some 33 per cent in industry and around 60 per cent in the service sector. The fast-growing service industry is the most important and includes tourism, the hotel industry, restaurants, transport and communications, domestic workers, financial services, and public administration. Factors that have contributed to the growth of the service sector in recent years include the rise in the standard of living in Italy (and Europe in general), leading to an increase in mobility, financial transactions, business, demand for leisure activities and tourism.
Industrial production in Italy is typified by the many small and medium-sized companies engaged in sectors such as the clothing, mechanical engineering and textile industries. However, there are also many large multi-national companies, a number of which are still family-dominated, such as Benetton, Fiat and Pirelli. Italy is also at the forefront of many hi-tech industries such as aviation, computing, electronics and telecommunications. Olivetti is one of the world's leading suppliers of computers and software products. Other prominent Italian industries include ceramics, glass, furniture, household goods and leather articles, which are world renowned for their design and quality. The country's most significant industries are based in the northern cities of Milan, Turin and the Veneto Region. For the last 50 years there's been a concerted effort to redress the long-standing economic imbalance between the north and the south of the country, although it has had little impact.
Industrial Relations: There has been a reduction in strikes (scioperi) in recent years, with the power of the trade unions lessening, although Italy still has the worst industrial relations in the European Union. At one time, strikes were so frequent (a day's holiday is jokingly referred to as e' giorno di sciopero) that a space was reserved in newspapers for announcements about public services that wouldn't be operating (nowadays you can obtain the latest information via the TV televideo service). The majority of strikes are in the public sector and the transportation industries.
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