Italy Country Report by Kate Walker

Country Report

COUNTRY REPORT Kate walker 1

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COUNTRY TRAITS CONTINENT: EUROPE GOVERNMENT: PARLIAMENTARY REPUBLIC SIZE: 301,338 SQ KM (116,346 SQ MILES) CAPITAL: ROME CURRENCY: EURO (1 EURO = 1.13 USD) POPULATION: 61.07 MILLION PRESIDENT: SERGIO MATTARELLA PRIME MINISTER: MATTEO RENZI

80%%

.93 Percent

Years old

45%%

99.2%%

92%%

CATHOLIC (MUSLIMS, ATHEISTS & AGNOSTIC)

MALES/ FEMALES

MEDIAN AGE

LITERACY

ITALIAN (ROMANIAN, N. AFRICAN, ALBANIAN)

Percent

DEBT REVENUE INFLATION MINIMUM WAGE TIME DIFFERENCE INDUSTRIES

Percent

132.7% of GDP $876 billion 0.3% no set minimum wage UTC+1 (6 hours ahead of Washington, DC, during Standard Time) tourism, machinery, iron and steel, chemicals, food processing, textiles, motor vehicles, clothing, footwear, ceramics 4

SOCIAL & TECHNOLOGY

SOCIAL · · · · · · · ·

Catholicism is very influential throughout Italy STRONG SOCIAL SECURITY SYSTEM HIGH HUMAN DEVELOPMENT INDICATORS (HIGH LITERACY AND LIFE EXPECTANCY RATES) Northern Italy is more developed than southern Italy GROWING DISPARITY IN INCOME Regionalism (South , center, north): Differences in Linguistics socio-economics, and traditions Hand gesturing can replace speaking Family is center of social structure

TECHNOLOGY · MOBILE SUBSCRIBERS GREW BY AN AVERAGE OF 8.26% DURING 2014. · ANTI-PIRACY LAW (MARCH 2014) COMBATING COPYRIGHT PIRACY OVER THE INTERNET. · ITALY IS NOT AS TECHNOLOGICALLY ADVANCED AS ITS OTHER EUROPEAN COUNTRIES. · IMPROVED INTELLECTUAL PROPERTY LAWS · TAX INCENTIVES TO ENCOURAGE RESEARCH WORKERS TO MOVE TO ITALY, THE CREATION OF A MERIT FUND TO PROMOTE QUALITY LEARNING IN SCHOOLS AND UNIVERSITIES

ECONOMY Italy’s gdp is $35,800 per capita and a growth rate of 0.8%. Italy has a diversified economy, which is divided into a developed industrial north, dominated by private companies, and a less-developed, highly subsidized, agricultural south, where unemployment is higher. The Italian economy is driven in large part by the manufacture of high-quality consumer goods produced by small and medium-sized enterprises, many of them family-owned. Italy is the third-largest economy in the euro-zone, but its exceptionally high public debt and structural impediments to growth have rendered it vulnerable to scrutiny by fiFINANCIAL markets. Public debt has increased steadily since 2007, topping 135% of GDP in 2015, but investor concerns about Italy and the broader euro-zone crisis eased in 2013, bringing down Italy’s borrowing costs on sovereign government debt from euro-era records. The government still faces pressure from investors and European partners to sustain its efforts to address Italy’s long-standing structural impediments to growth, such as labor market inefficiencies and tax evasion. In 2014 economic growth and labor market conditions continued to deteriorate, with overall unemployment rising to 12.7% and youth unemployment around 40%, but Italy began to recover in 2015, with marginal growth and a slight reduction in unemployment. Italy and the US have had amiable relations and two-way trade in 2015 totaling $59 billion. CIA.GOV

IMPORTS

EXPORTS

$509 BILLION

$466 BILLION

CRUDE PETROLEUM CARS PETROLEUM GAS PACKAGED MEDICAMENTS REFINED PETROLEUM

PACKAGED MEDICAMENTS REFINED PETROLEUM VEHICLE PARTS CARS VALVES

Germany ($70.2B)

($61.3B) Germany

FRANCE ($39.5B)

($49.8B) FRANCE ($40.8B) US

Vehicle parts

($22.5B) SWIZERLAND

Vehicle parts

gold

petrolum gas

computers

cars

Cars

Russia (22.8B)

($28.1B) UK

cars

Netherlands ($27.3B)

packaged medicaments

CHINA ($33.2B)

ENVIRONMENT NATURAL RESOURCES coal, mercury, zinc, marblE, pumice, sulfur, natural gas and crude oil reserves, Fish, arable land

CLIMATE predominantly Mediterranean; alpine in far north; hot, dry in south

TERRAIN mostly rugged and mountainous; some plains, coastal lowlands

G8 MEMBER at the forefront of providing environmental technology to developing countries but there is confusion over national and regional governing roles

FUTURE RISKS Monetary funds have been allocated towards economic concerns rather than environmental risks

POLITICAL OVER THE PAST 3,000 YEARS THE ITALIAN PENINSULA HAS BEEN IN THE MIDST OF MANY MIGRATIONS, INVASIONS AND WERE DIVIDED BY ITS MANY FOREIGN INFLUENCES AND GEOGRAPHY. DUE TO THIS, ITALIAN CITY-STATES WERE FRAGMENTED FOR MANY YEARS. VITTORIO EMANUELE II UNITED ITALY, AS ITS FIRST KING, IN 1861. IN 1922, BENITO MUSSOLINI WAS INVITED TO FORM A GOVERNMENT WITH KING VITTORIO EMANUELE III BUT MUSSOLINI DISSOLVED THE PARLAIMENT AND CREATED A FASCIST REGIME AND WAS PART OF THE AXIS POWERS. AFTER DISMISSING MUSSOLINI DURING WW-II, ITALY JOINED THE ALLIES AND A NEW CONSITUTION WAS MADE IN 1948 FOR A REPUBLICAN SYSTEM OF GOVERNMENT REPLACING THE MONARCHY.

VERY STRONG DEMOCRATIC PRINCIPLES IN PLACE CLOSE TIES WITH THE US - Italy May gain political and economic ground with this alliance

RISKS LACK OF CONSENSUS AMONG THE POLITICAL PARTIES IS A CAUSE FOR CONCERN

CORRUPTION IS PERCIEVED TO BE HIGH

ANTI-EURO SENTIMENTS

RISE OF TERRORISM AND ORGANIZED CRIME

REGIONS:

AUTONOMOUS REGIONS:

Abruzzo, Basilicata, Calabria, Campania, Emilia-Romagna, Lazio (Latium), Liguria, Lombardia, Marche, Molise, Piemonte (Piedmont), Puglia (Apulia), Toscana (Tuscany), Umbria, Veneto (Venetia)

Friuli-Venezia Giulia; Sardegna (Sardinia); Sicilia (Sicily); Trentino-Alto Adige (Trentino-South Tyrol) or Trentino-Suedtirol (German); Valle d’Aosta (Aosta Valley) or Vallee d’Aoste (French)

LEAD TIME NATIONAL HOLIDAYS 1 JANUARY - NEW YEAR’S DAY 6 JANUARY - EPIPHANY 5 APRIL - EASTER DAY 6 APRIL - EASTER MONDAY 25 APRIL - ANNIVERSARY OF LIBERATION 1 MAY - LABOUR DAY 2 JUNE - REPUBLIC DAY 15 AUGUST - ASSUMPTION DAY 1 NOVEMBER - ALL SAINTS 8 DECEMBER - IMMACULATE CONCEPTION 25 DECEMBER - CHRISTMAS DAY 26 DECEMBER - ST. STEPHEN’S

BUON FERRAGOSTO! Italians usually take Holidays off in august coincides with Assumption day Can Range from a long weekend to the entire month

NATURAL HAZARDS VOLCANISM MT ETNA (ETNA, SICILY) MT VESUVIUS (NAPLES, CAMPANIA) MT STROMBOLI (STROMBOLI island)

OTHER NATURAL HAZARDS CAN BE MUDSLIDES, FLOODING, AVALANCHES, LANDSLIDES AND EARTHQUAKES. FLOODING IS THE MOST ECONOMICALLY DAMAGING TO THIS REGION

EXPORT DAYS

IMPORT DAYS

DOING BUSINESS

MEETING SHAKE HANDS WITH EVERYONE IN THE GROUP WHEN MEETING IT IS COMMON FOR ITALIANS TO GESTURE WITH THEIR HANDS WHILE TALKING HUGS AND ‘KISSES ARE COMMON AMONG FRIENDS PERSONAL RELATIONSHIPS ARE IMPORTANT AND ITALIANS MAY ASK PERSONAL QUESTIONS THE ESTABLISHMENT OF TRUST IN A BUSINESS RELATIONSHIP IS JUST AS IMPORTANT AS THE PRESENTATION OF A BUSINESS PROJECT IT IS EXPECTED TO USE SIGNORA OR SIGNORE - PLUS LAST NAMES - UNLESS ASKED TO BE LESS FORMAL

EATING BUSINESS MAY BE CONDUCTED OVER LONG LUNCHES GETTING DRUNK IS NOT SOCIALLY ACCEPTED LEAVING BREAD UPSIDE DOWN IS BAD LUCK AND DISRESPECTFUL KEEP KNIFE AND FORK IN HANDS WHILE EATING AT ALL TIMES ALWAYS KEEP HANDS ABOVE THE TABLE BUT DON’T REST ELBOWS ON TABLE IT IS CUSTOM TO FINISH MOST MEALS WITH AN ESPRESSO

BUSINESS ETIQUETTE ATTIRE WILL BE PERCIEVED AS A SYMBOL OF STATUS AND COMPETENCE PUNCTUALITY IS NOT A PRIORITY BUT FOREIGNERS WILL BE EXPECTED TO BE ON TIME EXCHANGING BUSINESS CARDS IS COMMON BUT WITH ITALIAN TRANSLATIONS ON THE BACK NEGOTIATIONS MAY TAKE A LONGER THAN NORMAL TIME BUT IT IS IMPORTANT TO BE DIRECT

STATE OF APPAREL INDUSTRY

· ITALY IS ONE OF THE LEADING MANUFACTURERS AND EXPORTERS OF TEXTILES (2ND TO CHINA) · ITALIAN TEXTILE AND APPAREL INDUSTRY IS THE EUROPEAN LEADER · 50.5 MILLION EURO INDUSTRY (57M USD) · third biggest apparel exporter (1ST, China and 2ND, Mexico) · OVERALL SALES OF APPAREL AND TEXTILES HAVE BEEN ON THE DECLINE IN VALUE AND VOLUME (-2%) · RELY ON REPUATION FOR HIGHER QUALITY AND CAN NOT COMPETE WITH LOWER PRICED MANUFACTUERERS · THE ITALIAN TEXTILE SECTOR PRIMARILY CONSISTS OF MICRO AND SMALL ENTERPRISES MARKED BY A LARGE DEGREE OF PRODUCTION CYCLE DISPERSION, ESPECIALLYTHOSE SPECIALISING IN FIBER (YARN) TREATMENT IN DIFFERENT PRODUCTION PHASES · HIGH LABOR COSTS (ABOUT $23 PER HOUR) · MOST OF THE ITALIAN MARKET BELONGS TO TRADITIONAL AND INDEPENDENT RETAILERS · ITALY IS THE ONLY EC COUNTRY WHICH HAS BAILED OUT OF A NUMBER OF ENTERPRISES IN THE TEXTILE AND APPAREL SECTOR

TRADE AGREEMENTS TRANSATLANTIC FREE TRADE AREA (TAFTA)

TRANSATLANTIC FREE TRADE AGREEMENT BETWEEN USA AND EUROPE. RESULTING IN ECONOMIC GROWTH AND LOWER TARIFFS - STRICTER GUIDLINES FOR INTELLECTUAL PROPERTY IN FASHION INDUSTRY.

TRANSATLANTIC ECONOMIC COUNCIL (TEC)

ECONOMIC COUNCIL FOR EUROPE AND UNITED STATES REGARDING APPAREL INDUSTRY, TECHNOLOGY, TRADE COOPERATION AND PETROL CONSERVATION.

GENERAL AGREEMENT ON TARIFFS AND TRADE (GATT)

REGULATES INTERNATIONAL TRADE TO REDUCE TARIFFS AND REMOVE TRADE BARRIERS. STATE DEPARTMENT

SUPPLIERS BENIND S.P.A. VIA VILLA MINELLI, PONZANO VENETO, TREVISO, ITALY, 31050 +39 0422 519111 MENS AND BOYS CLOTHING CLIENTS: BENETTON MEXICANA

BRUNELLO CUCINELLI SPA PIAZZA DALLA CHIESA 6 06070 SOLOMEO PG ITALY +39 390 7569 7071 KNIT OUTERWEAR CLIENTS: BRUNELLO CUCINELLI USA INC. LOEHMANN’S INC. DESIGNERS S.A.C.

LORO PIANA S.P.A. C SO ROLANDI, QUARONA SESIA, 13017, ITALY CASHMERE PRODUCTS CLIENTS: WARREN CORPORATION LORO PIANA USA LLC SOUTHWICK APPAREL, LLC

TRANSPORTATION PORTS

SHIPPING COMPANIES

VENICE: 41 KM AWAY FROM BENIND S.P.A. $2,976.32 - $3,289.62 (NY, NY) 22 DAYS

COSCON ITALY SRL CARATELLO SRL CMA SRL

CITAVECCHIA: 181 KM AWAY FROM BRUELLO CUCHINELLI S.P.A $2,367.25 - $2,616.44 (NY, NY) 19 DAYS GENOA: 183 KM AWAY FROM LORO PIANA S.P.A. $2,256.15 - $2,493.64 (NY, NY) 19 DAYS

SEA ITALY HAD 467 MERCHANT VESSELS TOTALING 8,499,248 GRT (10,383,988 DWT). GENOA AND SAVONA ON THE NORTHWEST COAST AND VENICE ON THE ADRIATIC HANDLE THE MAJOR SHARE OF TRAFFIC TO AND FROM THE NORTHERN INDUSTRIAL CENTERS. NAPLES, SECOND ONLY TO GENOA, IS THE PRINCIPAL PORT FOR CENTRAL AND SOUTHERN ITALY, WHILE LIVORNO IS THE NATURAL OUTLET FOR FLORENCE, BOLOGNA, AND PERUGIA. MESSINA, PALERMO, AND CATANIA ARE THE MAIN SICILIAN PORTS, AND CAGLIARI HANDLES MOST SARDINIAN EXPORTS.

AIR ITALY HAS 136 AIRPORTS. TALY’S ONE NATIONAL AIRLINE, ALITALIA, WHICH IS ALMOST ENTIRELY GOVERNMENT-OWNED, MAINTAINS AN EXTENSIVE DOMESTIC AND INTERNATIONAL NETWORK OF AIR ROUTES. ROME’S FIUMICINO AND MILAN’S MALPENSA AND LINATE ARE AMONG THE MOST IMPORTANT AIRPORTS, BEING SERVED BY NEARLY EVERY MAJOR INTERNATIONAL AIR CARRIER. IN 2001, ITALIAN CIVIL AVIATION PERFORMED A TOTAL OF 1,521 MILLION FREIGHT TON-KM (945 MILLION FREIGHT TON-MI), AND CARRIED 31,031,000 PASSENGERS ON SCHEDULED DOMESTIC AND INTERNATIONAL AIRLINE FLIGHTS.

ROAD ITALY’S HIGHWAY SYSTEM, ONE OF THE WORLD’S BEST, IN 2002 TOTALED AN ESTIMATED 668,669 KM (415,511 MI) OF PAVED ROADS, OF WHICH 6,460 KM (4,014 MI) WERE EXPRESSWAYS. THESE EXPRESSWAYS CARRY HEAVY TRAFFIC ALONG SUCH ROUTES AS MILAN-COMO-VARESE, VENICE-PADUA, NAPLES-SALERNO, AND MILAN-BOLOGNA-FLORENCE-ROME-NAPLES.

RAIL ITALY MAINTAINED A TOTAL RAILWAY TRACKAGE OF 19,786 KM (12,295 MI). THE GOVERNMENT OWNS AND OPERATES 80% OF THE RAIL SYSTEM, THE ITALIAN STATE RAILWAY (FERROVIE DELLO STATO-FS). NATIONS ENCYCLOPEDIA

OVERALL ASSESSMENT

B A2

COUNTRY RISK RATING: POLITICAL AND ECONOMIC UNCERTAINTIES AND AN OCCASIONALLY DIFFICULT BUSINESS ENVIRONMENT MAY AFFECT CORPORATE PAYMENT.

BUSINESS CLIMATE RATING: THE BUSINESS ENVIRONMENT IS GOOD. CORPORATE FINANCIAL INFORMATION IS RELIABLE, WHEN GIVEN. DEBT COLLECTION IS REASONABLY EFFICIENT. INSTITUTIONS GENERALLY PERFORM EFFICIENTLY. INTERCOMPANY TRANSACTIONS USUALLY RUN SMOOTHLY IN THE RELATIVELY STABLE ENVIRONMENT RATED A2 ON GLOBAL EDGE RATING. GLOBAL EDGE RATING

STRENGTHS

WEAKNESSES

Relatively important role of industry High-end products (fashion, homewares, food products, mechanical engineering) Moderate debt levels of private sector Variety of tourism assets Good relations with us

WEAK PROFITABILITY OF SMALL COMPANIES AND BANKS INADEQUATE PRIVATE AND PUBLIC INVESTMENT HIGH LEVEL OF UNEMPLOYMENT (9%) LOW EMPLOYMENT RATE OF WOMEN SIZABLE INFORMAL ECONOMY (20%) LOW EFFECTIVENESS OF PUBLIC GOVERNMENT SECTOR BACKWARD SOUTHERN REGION

WORKS CITED https://www.cia.gov/library/publications/the-world-factbook/geos/it.html http://globaledge.msu.edu/countries/italy/ http://www.bbc.com/news/world-europe-17433143 http://0-web.b.ebscohost.com.library.scad.edu/bsi/pdfviewer/pdfviewer?vid=5&sid=ba97dd3c-e932-4704-b70a-0387f2cc92a8%40sessionmgr107&hid=107 http://atlas.media.mit.edu/en/profile/country/ita/ https://travel.state.gov/content/passports/en/country/italy.html http://0-web.a.ebscohost.com.library.scad.edu/bsi/pdfviewer/pdfviewer?vid=11&sid=7a19 3fc3-ea7f-42ce-8340-60470541ea85%40sessionmgr4001&hid=4204 http://businessculture.org/southern-europe/business-culture-in-italy/ https://globalconnections.hsbc.com/united-kingdom/en/tools-data/country-guides/ it http://www.state.gov/r/pa/ei/bgn/4033.htm http://www.wsj.com/articles/italian-bank-stocks-surge-on-romes-new-bad-debtplan-1460370269 http://www.britannica.com/topic/European-Community-European-economic-association http://www.economist.com/news/finance-and-economics/21698277-catastrophe-averted-theres-still-trouble-ahead-broad-shoulders?zid=307&ah=5e80419d1bc9821ebe173f4f0f060a07 http://www.euronews.com/2016/02/26/italy-s-senate-votes-to-recognise-same-sexcivil-unions/ http://www.italymagazine.com/featured-story/il-galateo-italian-manners-and-etiquette http://www.textile-future.com/-textile-manufacturing/news/a-glance-at-the-italiantextile-and-clothing-industry/1481/ http://www.fibtex.lodz.pl/2010/6/20.pdf

http://www.nationsencyclopedia.com/Europe/Italy-TRANSPORTATION.html http://www.state.gov/r/pa/ei/bgn/4033.htm

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