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The U.S.-Italian bilateral relationship is strong and growing. The U.S. and Italy cooperate closely on major economic issues, including within the G-8, which met in Genoa in July 2001. With a large population and a high per capita income, Italy is one of the United States' most important trade partners. In 2000 the United States was the fifth-largest foreign supplier of the Italian market and the largest supplier outside the EU. Total trade between the United States and Italy exceeded $33 billion in 1999. The U.S. ran a $12.1 billion deficit with Italy in 2000.

With more than 39,8 million tourists a year Italy is the fourth most visited country in the world, behind France (77), Spain (51,7) and United States (41,9). There are famous places like Venice, Florence, Siena, Milan, Naples or Rome, each with a rich cultural heritage from the Roman Empire. Famous objects are the ruins of Pompei, the Capitole, vineyards in Tuscany, Sicily with Mt. Etna, the coastline of the Adriatic Sea or the Alps.

Italy was invaded by the Visigoths in the 5th century, and Rome was sacked by Alaric in 410. By the end of the century the peninsula was mostly under Ostrogothic control, and the last Roman emperor, Romulus Augustus, was deposed in 476 by Theodoric the Great. The eastern half of the Empire, now centred on Constantinople, invaded Italy in the early 6th century, and the generals of emperor Justinian, Belisarius and Narses, conquered the Ostrogothic kingdom after years of warfare. The collapse of the Ostrogoths allowed the Lombards to fill the gap, and the Eastern Empire could not hold on to its reconquered territory against the Lombard invasion. The Lombards ruled Italy until the late 8th century when their kingdom was conquered by Charlemagne.

Italy's economic performance has at times lagged behind that of its EU partners, and the current government has enacted numerous short-term reforms aimed at improving competitiveness and long-term growth. It has moved slowly, however, on implementing certain structural reforms favored by economists, such as lightening the high tax burden and overhauling Italy's rigid labour market and expensive pension system, because of the current economic slowdown and opposition from labour unions.

Islam was almost entirely absent in Italy from the time of that country's unification in 1861 until the 1970s, when the first trickle of North African immigrants began arriving. These North Africans, mostly of Berber or Arab origin, came mainly from heavily Islamic Morocco, though they have been followed in more recent years by Tunisians, Albanians and to a lesser extent, Libyans, Egyptians, Pakistanis, Middle Eastern Arabs and Kurds. Some estimate the number of Italian converts to be around 10,000.

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.

Unions claim to represent 40% of the work force. Most Italian unions are grouped in three major confederations--the Italian General Confederation of Labor (CGIL), the Italian Confederation of Labor Unions (CISL), and the Union of Italian Labor (UIL), which together claim 35% of the work force. These confederations formerly were associated with important political parties or currents, but they have formally terminated such ties. Nowadays, the three often coordinate their positions before confronting management or lobbying the government. The three major confederations have an important consultative role on national social and economic issues.

In the final phases of the Second World War, the discredited king Victor Emmanuel III tried to raise the prestige of the monarchy by nominating his son and heir Umberto II "general lieutenant of the kingdom" and promising that after the end of the war the Italian people could choose its form of government through a referendum. A new constitution was written for the new republic, taking effect on January 1, 1948. The referendum at the origin of the Italian republic was, however, the object of deep discussion, mainly because of some contested results.

The Church (and especially the bishop of Rome, the pope) had played an important political role since the times of Constantine, who tried to include it in the imperial administration.

After the Lombard invasion, the popes (i.e. St. Gregory) were nominally subject to the eastern emperor, but often received little help from Constantinople, and had to fill the lack of stately power, protecting Rome from Lombard incursions; in this way, the popes started building an independent 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).

In 1929 Mussolini signed the Lateran Pacts with the Catholic Church (with whom Italy was in conflict since the annexation of Rome in 1870), leading to the formation of the tiny independent state of Vatican City. He was initially in friendly terms with France and Britain, but the situation changed in 1935-36, when Italy invaded Ethiopia despite their opposition (Second Italo-Abyssinian War); because of this and of the ideological affinities with the Nazi party led by Hitler,