Photo Gallery Italy's Decline
Under Prime Minister Mario Monti, Italy managed take a few steps in the direction of reform. But it wasn't enough and the country's economy is still struggling mightily. It is a continuation of a trend which has been going on for seven years. Here, closed up shops in Milan last year.
Prime Minister Enrico Letta recently announced a number of reforms that he would like to push through. It is a similar list to that which is predecessor Mario Monti sought to impose -- with little success.
Many manufacturers in Italy have either left the country or gone bankrupt. One reason are the high taxes levied by Rome. But unit labor costs are also sky high.
Furthermore, many smaller manufacturers in Italy are having trouble obtaining fresh money from the country's banks. But larger companies such as Fiat -- here, a Fiat factory in Atessa -- are having difficulties as well.
Many of Italy's problems can be traced back to its political leaders, known derisively in the country as "la Casta."
Clemens Fuest, president of the Center for European Economic Research (ZEW) in the southwestern German city of Mannheim, fears that the political situation is such that the country's debt level will continue to rise and ultimately Rome will face insolvency.
Former Prime Minister Silvio Berlusconi showed little interest in making needed reforms during his long stint in office. Now, the former head of government is facing prison.
Rome has made several deep cuts to public expenditures, including in the health sector. Here, a doctor joins a Monday protest against further cuts to health services.
Graphic: Italy's struggling economy.
