Abstract

Italy, the sixth largest economy in the world, has made tremendous progress over the years. Italy’s entry into the euro zone has prompted many of the recent positive developments including increased competition, reduced red tape and growing privatisation. The industrial North-Centre is the growth engine for the country. In 2002, Silvio Berlusconi, Italy’s richest man, was re-elected Prime Minister. He has promised to speed up privatisation, reform the state pension system, introduce labour market reforms and reduce the role of the government. But Berlusconi’s own credibility is under threat, in view of the several lawsuits pending against him. The case can be used to illustrate the considerations involved while framing economic policies in a developed nation with weak institutions.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

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Keywords

Country case study of Italy, Silvio Berlusconi, Euro, Economic policies in Italy, Macroeconomics, Economic and Monetary Union, Romano Prodi, G-7, Budget deficit in Italy, Gross Domestic Product in Italy, Social policies in Italy, Industry in Italy, Trade in Italy, Human resources in Italy