The Italian economy today does not enjoy a good press and gets very poor ratings from international agencies. There are two main reasons for this. Over the short run, this has been a consequence of the world financial crisis, which has hit Italy much harder than other countries. In 2007, Italy’s per capita income was 107 (with the European Union average = 100), while France’s stood at 108, Germany’s at 117, the UK’s at 111, and Spain’s at 103. In 2016, the respective positions were: Italy 96, France 105, Germany 123, UK 108, Spain 92, which shows that only Germany, among the biggest of the EU countries, has overcome the crisis, while the other countries have lost percentage points, with Italy and Spain the most severely affected. This book will offer plenty of arguments to explain the grim performance of Italy since the crisis, while also explaining why Italy is still in the G7, why it is still one of the largest economies of the EU and still remains a major exporter of manufactured goods, despite having lost 25 per cent of its manufacturing production since the crisis, chiefly as a result of a major shrinking of its domestic market.

Secondly, and more profoundly, over the long-run the Italian economy has never fitted the standard US growth models based on big business, standardization, economies of scale and transnationalism. Although this lack of fit did not prevent the country from modernizing and growing, it did result in a vast underevaluation of the Italian economy by international bodies that often left Italy out of international comparisons or alternatively negatively commented upon, even when it performed well. Some years ago The Economist compared the Italian economy to the leaning tower of Pisa suggesting that it was always on the brink of falling to pieces. One could point out that Pisa’s tower has been standing for seven centuries, and was recently consolidated so that it cannot fall down, at least for the foreseeable future and can be safely visited by masses of people. However, the image of fragility is the one that circulates: Italy as a country that cannot be relied upon, because it is not “stable” or “sustainable”, both politically and economically.