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Country Risk Analysis of Italy - Research Paper Example

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As the third largest economy in the euro zone, Italy presents both opportunities and threats as it moves from one crisis to another. Political formulations of different partners have given rise to policy uncertainties…
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Country Risk Analysis of Italy
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Download file to see previous pages The strong export potential, relative underdevelopment of the southern region and the markets of north Africa and east European countries are the favorable endowments. Keywords: Economy, politics, geography, industry, immigration, drugs, EEC, disparities, factor productivity. Country Analysis of Italy Introduction It is important to evaluate conditions that support or hinder the prospects for a business in a particular location while undertaking new start ups, expansion, acquisition and/or other forms of investment. Political, economic, and geographic factors are taken into consideration for evaluation and decision making. Implicit within these broad categories are the demographic and legal factors. A range of reputed published resources like the country reports of the London based Economic Intelligence Unit, the CIA World Fact Books, the World Bank, IMF and European Commission reports can provide the necessary data for analysis for all major countries. The present paper deals with country analysis of Italy, an EU member country that is in the thick of a political and economic crisis in the recent past. Italy became a republic in 1946 after the World War II and is a member of NATO and European Economic Community (EEC) in the euro zone. This country of about 60 million people with practically 100% literacy rate and dominated by the Roman Catholic faith followers, is a developed economy and has been a strong supporter of the political and monetary integration of the EU Zone countries (Anon, n.d., geography.about.com). Italy is a republic, headed by a President as the constitutional head, while the executive authority vests with the Prime Minister (also called the president of the council of ministers) (CIA, 2011). It follows the constitutional form of democratically elected government with two houses of legislature (Senate and Chamber of Deputies), the judiciary and the executive wings having respective roles. Although Italy is not a signatory to the International Court of Justice jurisdiction, it respects international legal responsibilities like most democratic nations (CIA, 2011). The country is divided into twenty administrative regions of which five regions enjoy a higher degree of autonomy. Regions are further divided into provinces, numbering about 100 at present. Each province is under the watchful eyes of a representative of the federal government. Separatist tendencies, left-wing extremism, and remnants of fascist elements have been sources of political challenges that Italy faced since inception. These risks continue even today, although they have been substantially controlled. Political parties of different hues like left-of-centre or right-of-centre and others form coalitions among themselves and with other parties to govern the country. Italy has largely overcome the period of extremist left-wing terrorism between 1970s and 90s (Dugdale-Pointon, 2007). Widespread corruption has been the bane of Italian politics and economy, and this has led to short-lived spans of governments, policies and programs. Investigations into corruption scandals have caught up with many politicians, resulting in introduction of political and electoral reforms. Scandals involving the personal life of the immediate past Prime Minister Silvio Berlusconi and the deep economic ...Download file to see next pagesRead More
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