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After the German army defeated Poland, Denmark, and France, a still-jealous Mussolini decided to use Albania as a springboard to invade Greece. The Italians launched their attack on October 28, 1940, and at a meeting of the two fascist dictators in Florence, Mussolini stunned Hitler with his announcement of the Italian invasion. Mussolini counted on a quick victory, but Greek resistance fighters halted the Italian army in its tracks and soon advanced into Albania. The Greeks took Korēė and Gjirokastėr and threatened to drive the Italians from the port city of Vlorė.

The Italian economy has changed dramatically since the end of World War II. From an agriculturally based economy, it has developed into an industrial state ranked as the world's fifth-largest industrial economy. Italy belongs to the Group of Eight (G-8) industrialized nations; it is a member of the European Union and the OECD.

At the beginning of the 16th century Italy started to suffer the effects of an economic crisis due to the move of the main trade routes from the Mediterranean to the Atlantic. Most of the small and weak Italian states were defeated by foreign powers (mainly Spain); some of them (e.g. Milan and Naples) were annexed, others (e.g. Venice and Florence) were reduced to a lesser role. The papacy lost much of its importance both because of military defeats and of Protestant Reformation, which deeply weakened the catholic church.

Although Roman Catholicism is the majority religion — 85% of native-born citizens are nominally Catholic — there are mature Protestant and Jewish communities and a growing Muslim (see: Islam in Italy) immigrant community. All religious faiths are provided equal freedom before the law by the constitution.

The birth of the Italian republic (officially on June 2, 1946) is a key event of Italian contemporary history. It is controversial because of suspicions of fraud that were advanced by monarchists). Until 1946, Italy was a monarchy ruled by the House of Savoy (kings of Italy and, previously, of Sardinia). In 1946, after the results of a popular referendum, it became a republic. A Constituent assembly was elected at the same time to prepare a new constitution for the Republic. This article is about the Referendum on the form of State.

The republican tradition in Italy had been started by Giuseppe Mazzini in the 19th century, but it immediately found a general consensus among the new political forces. The movement Giustizia e Libertą, that continued the traditional Mazzinian ideology, was the second important force during the resistance. It posed the question of the form of the state as a fundamental precondition to developing any further agreements with the other parties. Giustizia e Libertą joined the Comitato di Liberazione Nazionale (CLN). The various competing political factions agreed that a popular referendum would be held to determine the future choice of Head of State.

In the fifties Italy became a member of the NATO alliance and an ally of the United States, which helped to revive the Italian economy through the Marshall Plan. In the same years, Italy also became a member of the European Economical Community (EEC), which later transformed into the European Union (EU).

Most raw materials needed by industry and more than 75% of energy requirements are imported. Over the past decade, Italy has pursued a tight fiscal policy in order to meet the requirements of the Economic and Monetary Union and has benefited from lower interest and inflation rates. Italy joined the Euro from its conception in 1999.

In the politically unstable situation after the fall of the western empire, the Church often became the only stable institution and the only source of learning. Even the barbarians had to rely on clerics in order to administrate their conquests. Furthermore, the catholic monastic orders, such as the Benedictines had a major role both in the economic life of the time, and in the preservation of the classical culture.

Italy strengthened its ties with Germany on May 22, 1939 when both Nations signed the Pact of Steel This document solidified the alliance between the two regimes.

Unemployment has been steadily decreasing but remains high (8.6% in 2003, its lowest level since 1992). It is especially severe in the south where average unemployment exceeded 20% this year. Women and youth have significantly higher rates of unemployment than do men. A rigid labor market serves as a disincentive to job creation. There is a significant underground economy absorbing substantial numbers of people, but they work for low wages and without standard social benefits and protections.

Italy has worked closely with the United States and others on such issues as NATO and UN operations as well as with assistance to Russia and the New Independent States, Middle East peace process, multilateral talks, Somalia and Mozambique peacekeeping, and combating drug trafficking, trafficking in women and children, and terrorism.

At the beginning of World War II Italy remained neutral (with the consent of Hitler), but it declared war on France and Britain on June 10, 1940, when the French defeat was apparent. Mussolini believed that Britain would beg for peace, and wanted "some casualties in order to get a seat at the peace table", but that proved a huge miscalculation. With the exception of the navy, the Italian armed forces were a major disappointment for Mussolini and Hitler, and German help was constantly needed in Greece and North Africa.

At the beginning of World War I Italy remained neutral, since the Triple Alliance had only defensive purposes, and the war was started by Austria. However, both the central empires and the Entente tried to attract Italy on their side, and in April 1915 the Italian government agreed (London Pact) to declare war on Austria in exchange for several territories (Trento, Trieste, Istria, Dalmatia). In October 1917, the Austrians, having received German reinforcements, broke the Italian lines at Caporetto, but the Italians (helped by their allies) stopped their advance on the river Piave, not far from Venice. After another year of trench warfare, and a successful Italian offensive in autumn 1918, the exhausted Austria surrendered to the allies on November 4 1918, soon followed by Germany.