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U.S.-Italy Relations Fact Sheet released by the Bureau of European and Canadian Affairs, U.S. Department of State March 5, 1998

The U.S. and Italy share a warm relationship dealing with a variety of foreign affairs issues. As a partner in NATO, the United Nations, OECD, GATT/WTO, and OSCE, Italy has close ties with the United States.

A founding member of the European Community -- now the EU -- Italy was admitted to the United Nations in 1955 and is a member and strong supporter of NATO, the Western European Union, and the Council of Europe.

Italy is the host of several important U.S. and NATO military bases, including U.S. Army barracks at Vincenza and Livorno, Air Force personnel at Aviano, and Navy personnel at Sigonella, Gaeta, and Naples -- home of the U.S. Navy's Sixth Fleet. In addition to the 17,000 U.S. military personnel stationed in Italy, Rome is the host of the NATO War College.

Because of its position in the Mediterranean, Italy is critical to regional security and for enhancing stability in the Balkans, North Africa, and the Middle East.

The bilateral relationship between Italy and the U.S. is strengthened by a strong interdependence on each other commercially. As one of the United States' most important trading partners, total trade between the U.S. and Italy exceeded $29 billion in 1996. That same year, the U.S. was the fifth-largest foreign supplier of the Italian market and the largest supplier outside the EU. Both are members of the G-7, leading to close cooperation on major economic issues.

The Italian Government has made entry into the European Monetary Union in the first tranch of countries a primary goal for Italy. In order to reach this goal, the Government of Italy has made serious efforts to address Italy's two most pressing and long-standing macroeconomic problems -- public sector debt and public sector deficit. The deficit, which was 6.76% of GDP in 1996, dropped to below 3% in 1997, the level required for monetary union. The stock of debt, about 124% of GDP, has been dropping as well. In addition, the Government of Italy is taking steps to address pension, welfare, and medical reform.

Real growth in 1997 was slow, around 1%, but inflation dropped to record lows, around 1.9%. Unemployment, exacerbated by a rigid labor market and strong job protection rules, continues to be a major problem, remaining over 12%. Italy continues its ambitious privatization efforts to reduce the government's role in the economy and has sold or is in the process of selling important public sector monopolies in telecommunications, electricity, and energy sectors.

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