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Italy has few natural resources. With much of the land unsuited for farming, it is a net food importer. There are no substantial deposits of iron, coal, or oil. Proven natural gas reserves, mainly in the Po Valley and offshore Adriatic, have grown in recent years and constitute the country's most important mineral resource. Most raw materials needed for manufacturing and more than 80% of the country's energy sources are imported. Italy's economic strength is in the processing and the manufacturing of goods, primarily in small and medium-sized family-owned firms. Its major industries are precision machinery, motor vehicles, chemicals, pharmaceuticals, electric goods, and fashion and clothing.

Major political parties, beset by scandal and loss of voter confidence, underwent far-reaching changes. New political forces and new alignments of power emerged in March 1994 national elections. The election saw a major turnover in the new parliament, with 452 out of 630 deputies and 213 out of 315 senators elected for the first time. The 1994 elections also swept media magnate Silvio Berlusconi (leader of "House of Freedoms" (Casa delle Libertą) coalition) into office as Prime Minister. Berlusconi, however, was forced to step down in January 1995 when one member of his coalition withdrew support. The Berlusconi government was succeeded by a technical government headed by Prime Minister Lamberto Dini, which left office in early 1996.

At the end of the 8th century the popes definitely aspired to independence, and found a way to achieve it by allying with the Carolingian dynasty of the Franks: the Carolingians needed someone who could give legitimacy to a coup against the powerless Merovingian kings, while the popes needed military protection against the Lombards. As a result, in 774 the Franks invaded and defeated the Lombards, and their leader Charlemagne was proclaimed legitimate king of the Franks by the pope. Later, in 800, Charlemagne was also crowned emperor of the Holy Roman empire by the pope; the new emperor (who was never recognized as such by the Byzantines) immediately conceded direct rule over central Italy to the pope, creating the Papal States.

Despite the everlasting struggles with foreign powers and within themselves, the northern cities' wealth continued to grow, until at least the 15th century, leading to great intellectual and artistical achievements such as those Dante, Giotto and of the Italian Renaissance masters (such as Michelangelo, Leonardo and Raffaello). This golden age ended in the 16th century, when the Italian city-states became prey of larger national states such as France and Spain.

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.

crisis arose in Italian society as a result of the First World War, social inequalities, and the consequent tension between Marxist and left-wing parties on one side and conservative liberals on the other. This crisis led to the advent of Fascism, which destroyed freedoms and civil rights, and establishing a dictatorship. Fascism broke the continuity of the parliamentary tradition. The support of ruling elite and especially Italian monarchy was crucial for the seizure of power by Benito Mussolini. After the March on Rome, the King Vittorio Emmanuele III refused to sign a decree to declare a state of siege, and asked Mussolini to form a new government. This King's decisions were taken in accordance with the Statuto, but in contrast with the parliamentary practice of Italian liberal state.

Italy's dramatic self-renewal transformed the political landscape between 1992 and 1997. Scandal investigations touched thousands of politicians, administrators, and businessmen; the shift from a proportional to an Additional Member System (with the requirement to obtain a minimum of 4% of the national vote to obtain representation) also altered the political landscape.

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.