The Most Important Challenges Facing Italy

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Italy is one of the world’s top destinations for tourists and relocating Expats alike. However, despite the fantastic weather, the famous Dolce Vita, delicious food and astoundingly beautiful scenery the country is far from perfect and has some deep rooted problems.

Every country, naturally, has its fair share of problems but because the quality of life in Italy is so exceptionally high the issues that the country faces are more surprising than they’d otherwise be.

Many of the problems that Italy is facing have been gradually improving in recent decades. Nonetheless, for tourists and especially Expats it’s worth being aware of the problems that you’ll see in the country after your arrival. For most tourists, the country’s major issues shouldn’t pose too much of a problem but for Expats they can be more serious.

Therefore, Expats need to be aware of Italy’s main issues so they can navigate safely through their time in the country.

The Italian Economy.

The Italian economy has been struggling with recessions and poor performance for many decades. This was compounded in 2010 when many of the European governments thrust their populations into ‘austerity measures’ in an effort to mitigate the impacts of the global financial collapse of 2008/9.

These measures have had a severe impact on the potential for future economic growth and Italy has suffered more than almost any other European nation. Since austerity measures were imposed in Italy, the economy has shrunk by almost 7% after which the global Covid-19 pandemic and the consequent lockdowns only compounded the decline.

The Italian economy, and many of its small businesses, rely heavily on the 90 million tourists that visit each year. However, the global lockdowns had a massive impact on the Italian tourist industry and it still hasn’t fully recovered yet.

The rate of unemployment in Italy currently stands at around 10%, way above the European average. Unemployment is highest among the younger generations and women which has also hampered the economic growth of Italy. In fact, more than 35% of under 25 year olds in Italy are unemployed, with little prospect of finding a job.

However, there were a few silver linings to the poor management and negative growth of the economy. As a result of the austerity measures and the collapse of the tourist industry nearly 3 million Italians began to grow their own fruit and vegetables at home. This helped to create stronger community bonds and a more sustainable approach to food production even if only at a local level.

The failing economy has also been driving entrepreneurship and inventiveness. The Italian tourist industry has been focusing more of their development on sustainable tourism, agritourism and higher quality luxury facilities. Although tourism is still at a level that’s below the normal rate, these improvements will serve the Italian tourist industry well in the longer term.

Shrinking Population.

Italy’s population, like the populations of most Western nations is shrinking and also aging. This puts a huge burden on the younger generation. Like other Western nations, Italy’s answer to this problem is massive immigration, both legal and illegal. Unlike the United States, and to some extent the UK, Canada and Australia, Italy has not been able to attract highly qualified immigrants from other nations like India or China. So the immigrants that Italy is attracting only adds to the problem.

The European Union PLUS NATO Is Outdated.

At a high level, the EU was an idea proposed by the United States after WWII to try and prevent the Europeans from fighting with each other. Also, the United States never left Europe after WWII and became the de facto armed forces of the EU. This mechanism worked for a while as long as there was a “enemy” like the Soviet Union. The Soviet Union is no more and the powerful up and coming countries are mostly in Asia, countries like India, China, Indonesia and Philippines. The United States has been able to take advantage of the growth of Asian economies, but the EU nations have not. Countries like India cannot easily strike a trade deal with Italy for example, because Italy has to comply with EU rules and regulations. Also, Asian nations know that the Italians and all NATO nations do not have sovereignty because of the presence of large numbers of American troops in their soil.

The Italian Judicial System.

The system of justice in Italy is famously slow, corrupt and nepotistic. Even simple disputes can end up taking years to reach a conclusion which can be costly for defendants and waste the energies of a bureaucratic system that is already inefficient and underperforming.

Incredibly, according to the Council of Europe, the cost of Italy’s inefficient and slow moving legal system costs the country as much as 1% of its GDP each year. There are many reasons for the inefficiency that plagues the Italian court system. One of the clearest issues is that the court proceedings themselves are overly extensive without the clarity needed to resolve complex problems.

Outside observers have noted that even with the best will in the world the task of reforming the justice system will be hard. The system in Italy is based on more than 150 years of corruption, mismanagement and nepotism. This was made worse by the immorality of the fascist governance of the mid 20th Century which has left an indelible stain on the justice system, even to this day.

Another factor that has added to inefficiency of the Italian legal system is that the country is one one of the most litigious in the world. Each year, almost 3 million separate cases are brought to the courts seeking resolution. As a result, the courts have a backlog of cases that adds up to almost 10 million cases, including both criminal and civil cases, yet to be resolved. On top of this, a huge number of cases are appealed each year which only adds to the growing backlog of cases.

The justice system also has to review tens of thousands of cases each year and pay out huge settlements for the numerous miscarriages of justice which are brought to light through the appeals system. Amazingly, as a result of the slow and inefficient system many defendants who are awaiting trial are simply let out of prison, with their record wiped clean, because the statute of limitations has expired following the lengthy legal process that they are entitled to.

Corruption And Serious Organized Crime.

Of course, Italy is well known for its organized crime families that are frequently portrayed and even lionized in Hollywood movies. However, in Italy the problems with organized crime are not the subject for the silver screen and are, instead, a wide spread reality of life.

This has slowed economic growth and taken a serious sum of money from the public purse which also reduces the country’s economic progress. In fact, the Italian state auditor has estimated that organised crime costs the state over $60 billion per year; and even this is likely to be a considerable underestimate.

The Italian mafia has long played a major role in society but over the past decades of recession and economic collapse the mafia organizations have gained more power and leverage in society. The mafia is best known for their dealings in drug running and protection rackets but in recent years they have been diversifying and expanding their portfolios.

In the modern world, major Italian mafia organizations, such as the Camorra and the Sicilian mafia, have been investing more of their efforts into new sectors of the economy such as public transport, waste disposal, fashion and even loan sharking. The mafias have also geographically expanded their operations and now operate all throughout Italy as well as dominating the cocaine trade across the whole European continent.

Mafia organisations also took the recession as an opportunity to provide loans to Italians who were struggling financially. However, the SOS Impresa, Italy’s state anti-organised crime group, has been making gains against the mafia and are, to an extent, limiting their growth.

It’s hard for officials to say for sure how much the various organised crime syndicates really make. This is partly because of the fear that the general public has of reporting their activities but it’s also because they run a highly efficient operation with tentacles in every part of the economy.

The connections of the major mafia figures also reach deep into the Italian government. There were, for example, constant rumor’s during Silvio Berlusconi’s Premiership that he was a mafia plant who only assumed office because of his organised crime connections. This criminal influence also reaches into all layers of local and municipal government which makes stopping organised crime in Italy almost impossible.

Despite the progress that the state and their branches of law enforcement have made in their fight against organised crime the problem is so deeply entrenched in Italy and elsewhere that it’s difficult to imagine a way that the Italian mafia can ever be stopped once and for all.

Politics In Italy.

All countries have problems that relate to their political systems but Italy has more than the average. Plagued by persistent rumours of organized crime connections, corruption, nepotism, inefficiency and overspending while the economy has been failing for decades, have left average Italians with a very low opinion of their leadership.

What’s more, Italian governments themselves are unstable and usually unpopular. For instance, Italy has had more governments than any other major European country since World War II, with few governments even lasting their 5 year full term in office.

Most Italians are fed up with politics and many don’t even take the time to vote anymore, believing it to be a complete waste of time. This obviously compounds the problems in government because there is less public oversight than they deserve but it also has ramifications that ripple through wider society.

When people believe that the government is corrupt and the system is broken beyond repair they are far more likely to avoid paying taxes and turn a blind eye to nepotism and corruption in their own affairs. This further adds to the failure of the government who doesn’t receive the full taxes they need to regenerate the economy and other public services.

Public apathy, government corruption and mismanagement has left the Italian political system in tatters and although there are small movements that seek to reform the system their work is certainly cut out for them.

The North-South Italian Divide.

One of the most remarkable aspects of Italian society is the North-South divide. This divide has its roots in ancient history and has cultural, religious and social significance. Some commentators speculate that the origins of the problem began with the unification of the country in 1861 while others say it is far older. Either way, this divide has survived into the modern age and has huge implications for the country and its people.

Firstly, the South of Italy is, in general, far less wealthy than the Northern provinces. According to economic estimates, the average GDP per person in the Southern provinces of Italy is around 40% lower than that of the Northern provinces. The Italian government has also noted that almost 70% of the children living in poverty in Italy live in the South.

Poverty, access to services and economic development is all lower in the South of the country than in the North. The poor economic and career opportunities for young people in the South has led to a large migration Northward. This has left the Southern provinces with an aging population and too few young people to do many of the important jobs in their provinces.

Secondly, the South of Italy is much more traditional with stronger attachments to religious and societal customs and culture. Religion plays a much more central role in the life of Southern Italians; a phenomenon which can be seen in everything from wedding customs to the way that Christmas is celebrated. These differences in outlook may not have an immediate effect on life in Italy but in the long run they make the chances of the North-South divide disappearing less likely.

The problem of the North-South divide has existed for generations and so the solutions will have to be extremely inventive to achieve success. There are hopes that new economic opportunities, such as remote work and high tech openings in the global economy, will encourage younger Italians to stay in the South to benefit from the lower house prices and cost of living while still creating sustainable careers in their chosen field.

This kind of change could lead to the North and South becoming more genuinely unified in the long run but in the shorter term it seems fairly likely that these ancient problems will continue to manifest in the cultural life of modern Italy.

Italy Still A Great Place To Relocate To.

Although Italy has its cultural, economic, legal and equality issues, the country remains a fantastic destination for tourists and Expats. The Dolce Vita, or the ‘sweet life’, the incredible scenery, amazing cuisines and unparalleled artistic and cultural heritage make it one the world’s most incredible countries to visit or live in.

If you are in Italy as a foreigner, it’s not usually a good idea to criticize these entrenched problems too strongly when you’re talking to locals. Generally speaking, unless you know them very well, it’s better to be tactful and as respectful as possible when these topics come up in conversation.

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