Italy's Service Sector

Communications and transport
Without structural modification, the communications network has been expanded considerably in the last few decades, with the construction of motorways, due to increased traffic which has now practically reached saturation level. The railway networks are now reasonably well integrated (under-utilized branch lines have been closed, but further radical modernization is required) as are road communications, though the latter is still unable to cope with the tremendous increase in heavy transport, now a vital factor in the transportation and distribution of goods. Port facilities appear to be under-utilized and not always functional, due again to lack of integration between shipping and land transport (though Italy has one of the biggest merchant fleets in the world). Equally underdeveloped compared to international services in relation to real demand are the domestic airline services.

 Commerce and the financial sector
With over a quarter of the working population and roughly a third of the gross national product, the service sector (distribution, banking and insurance, hotel facilities, shops etc.) is a pillar of the national economy, in spite of many disadvantages, such as the large number of small, largely family business and the use of backward methods. Mass distribution (supermarkets and multiple stores), however, are well organised, particularly in Northern Italy, while in the South the small retail shop, often run by former agricultural workers, not always with entrepreneurial ability, is the rule. Banking, insurance and finance in general are well developed. Territorial imbalance here depends on particular local situations (like the excessive number of banks in Sicily, far greater than that in Piedmont), but generally these services are concentrated mainly in regions with the highest degree of economic and commercial activity: Lombardy, Piedmont, Veneto, Emilia-Romagna and Tuscany. Foreign trade is particularly flourishing and hinges not only on relationships with the ECC countries, but also with the rest of the world (USA, the Latin-American countries and the Afro-Asiatic Middle East). The importance of foreign trade for the national economy is demonstrated by the fact that raw material imports and finished product exports complement each other, but also by the contribution made by international trade fairs (Milan, Bari, Palermo, etc.) and technological fairs (Milan, Genoa, Turin, Verona etc.) which attract economic operators from all countries.

 Tourism and the balance of trade
For its natural characteristics, and for its rich heritage of history, art and culture, the expression of the landscape and of its inhabitants, Italy is one of the countries that attract the greatest number of international tourists. Tourism may be evaluated primarily by the volume of hotel business and that of other structures: the incidence of arrivals from abroad and of over a third of internal tourism. Over the past few years, roughly 20 million foreign tourists have visited Italy, and some 35 million Italians have made use of hotel and allied services. From a strictly economic viewpoint, foreign tourism brings a consistent volume of currency, as is indicated by the positive results of the balance of tourism which, for the past few years, has shown a surplus of c. 10-12 billion lire. In this way, it tends to compensate the deficit in the balance of foreign trade which has always been negative, reaching a deficit of 23 thousand billion lire in 1985. The recent revival of the national economy, with a vigorous new impulse to productivity, the drop in inflation (down to levels of 20 years ago) and the increase in the gross national product, are reflected in the reduction of the balance of foreign trade which, in 1986, was less than 4 thousand million lire.

 Italy in Europe and the Mediterranean
The geographical position of the Italian peninsula at the centre of the Mediterranean and, though practically surrounded by sea, still firmly part of continental Europe, accords the country a geopolitical function of primary importance. Italy's long history stretching back some thousands of years and its membership of a number of economic, political and cultural organizations concerning Western Europe and the Mediterranean countries (apart from that of worldwide bodies uniting practically all countries in a more or less direct offshoot of UNO) serve to confirm this function. Apart from its membership of the European Economic Community (EEC), Italy is also a member of the European Coal and Steel Community (ECSC), the European Atomic Energy Community (EURATOM), the Council of Europe (all the Western European Countries, with Turkey, Cyprus and Malta), NATO (politico-military alliance among certain Western Europe and Mediterranean countries and North America), OECD (an economic organization of European and Australasian countries and North America) and WEU (Western Europe Union), with politico-military and socio-economic aims.