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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.

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.

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.

Puglia (Apulia) and Calabria in the south serve up a very different atmosphere to the north, with centuries of occupation and settlement leaving behind traces of many, many cultures and civilisations. Ditto Sicily (Sicilia). These areas, along with less visited ones such as Marche, Emilia-Romagna and Liguria are likely to offer better bargains for the visitor to Italy.

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 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.

The Italian Republic or Italy (Italian: Repubblica Italiana or Italia) is a southern European country, comprising a boot-shaped peninsula and two large islands in the Mediterranean Sea: Sicily and Sardinia. It shares its nothern alpine boundary with France, Switzerland, Austria and Slovenia. The independent countries of San Marino and the Vatican City are enclaves within Italian territory.

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.

In order to prevent the further expansion of Protestantism, the church endorsed the wars of the emperor Charles V (who was also king of Spain) and his successors, and started the so-called Counter-Reformation, with which it established a strict control over intellectual life in catholic countries.

Significant changes are occurring in the composition of this trade. More value-added products such as office machinery and aircraft are becoming the principal U.S. exports to Italy. The change reveals the growing sophistication of the Italian market, and bilateral trade should expand further. In 2000 the United States imported about $24.5 billion in Italian goods while exporting about $12.4 billion in U.S. goods to Italy. U.S. foreign direct investment in Italy at the end of 1999 exceeded $14.1 billion.