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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