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Until recently a successful economic power based on small companies and a large 'Black' Economy, as well as successful large companies, despite an inefficient government and state infrastructure (poor mail service, large bureaucracy, political paralysis). Northern Italy has a modern economy; southern Italy has a traditional stagnant economy, probably as a result of a mafia culture which siphons off the profits via a criminal "tax" . The northern factories are often staffed by southern workers who migrate to the north. Badly affected by growing political upheaval following the end of the Cold War. Adopting the euro may integrate Italy further into the EU economy but in practice seems to have led to high unemployment and stagnation. Before the euro Italian governments were in the habit of devaluing the Lira against other currencies to keep their export prices low. Now they can't do that. Could Italy leave the euro system? Most commentators think this would be impossible or disastrous. Italy now has the worst performing economy of the "original six" with low wages and rising unemployment. Government immobilism seems to make it impossible to make changes. |
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