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ITALY

(Level 2) As part of the European Union, Italy is a large and developed economy.
However, it suffers from a sharp North-South divide and decline of births and the
workforce. The confusing regulatory environment, lack of transparency and
inadequate infrastructure present further challenges.

1. Crime
(Level 3) Italy has a moderate rate of violent crime. Foreigners are targeted by thieves.
The organized crime networks are extensive, especially in the South. The Mafia groups
include regional government members and can influence foreign business.

2. Natural Disasters
(Level 2) Italy’s central and eastern sections are prone to earthquakes. Volcanoes remain
a possible threat. Italy has a good disaster response infrastructure, especially in the north.

3. Political and Regulatory Environment


(Level 3) The confusing regulatory environment, lack of transparency and inadequate
infrastructure present challenges to businesses. Prime Minister Berlusconi’s government
has introduced some labor market and pension reforms, but more tax, education and
judicial reform is needed. Berlusconi is expected to remain in power after upcoming
elections.

4. Labor Action
(Level 3) Labor unions are influential in Italy's political and regulatory environment.
Approximately 40 percent of Italy's labor force belongs to three major trade unions. The
government places restrictions on striking for public workers including advanced
notification and prevention of multiple strikes.

5. Terrorism and Insurrection


(Level 2) Because of its involvement in Iraq, Italy has been threatened with attack by al-
Qaeda. Italy’s larger cities have large Muslim immigrant populations that could harbor
jihadist cells. Italian newspapers printed the controversial caricatures of the Prophet
Mohammed, which could lead to attacks against journalists. In addition, there are
anarchist and anti-globalization groups active in the country.

6. International Friction
(Level 1) International friction in Italy is practically non-existent. Illegal immigrants
attempt to enter the EU via the sparsely guarded coastline and islands. As part of the EU,
Italy is tied into trade disputes the EU has with other countries.

7. Non Governmental Organizations


(Level 2) Italian NGOs tend to focus on environment, human rights and humanitarian
efforts although they do not tend to be influential on the political and regulatory
environment.

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