BMI's Executive Summary

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In Q407 the centre-left government of Romano Prodi continued to struggle with a very narrow majority, surviving a series of closely-fought parliamentary votes of confidence. Defence and security issues during the period included action against organised crime, particularly the Calabrian 'Ndrangheta, and a toughening stance against criminal activity by immigrants, especially from the European accession countries such as Romania. BMI's newly released Italy Defence and Security Report Q108 notes that as far as fundamentals are concerned, Italy has a medium-term stable political outlook with a low risk from terrorist threat. This must be qualified by a continuing vulnerability to corruption at various levels within the political system, and an antagonistic relationship between the judiciary and the politicians. A further complicating factor is the question of bias in the media, with new legislation expected to tackle this thorny question. There is resistance to reform and a threat of a deadlock, either at national political level because after the next elections there may be a hung parliament, or at interest group/industrial relations level, because reform proposals may get blocked. The political system remains somewhat vulnerable to authoritarianism.

There are currently no major conventional military threats to Italy, but the threat from international terrorism is significant. The threat of domestic terrorism has been significantly reduced since the dismantling of the extreme left-wing terrorist group, the Rosa Brigatta, though some fragmented members continue to operate. Italy's withdrawal of troops from Iraq at the end of 2006 helped to reduce, but of course not eliminate, the threat from international terrorism.

To defend against these threats and ensure the country's national security, Italy boasts one of the largest armed forces in Europe, which is, under its budgetary constraints, modernising to adapt to the changing nature of threats and warfare, and focusing on force projection and complete integration at multinational levels. The defence industry has obtained significant domestic contracts in recent years, but is looking increasingly towards pan-European and trans-Atlantic ventures to ensure its growth.

Contents

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Chapter 1 - Executive Summary

SWOT Analysis

Italy Political Swot

Italy Security SWOT

Italy Defence Industry SWOT

Italy Economic SWOT

Chapter 2 - Political Overview

Domestic Political Outlook

Chapter 3 - Security Risk Analysis

BMI’s Security Ratings

Risk Ratings

Table: Italy Regional Risk Rating

Table: Italy State Terrorism Vulnerability Index

Regional Security: Europe

Overview

Internal Terrorism

International Terrorism

Criminal Activities

Italy Security Risk Ratings

Italy Conflict Risk

Italy Terrorism Risk

Italy Physical Safety Risk

Chapter 4 - Security Overview

Internal Security Situation

Table: Italy Insurgent Groups

Domestic Terrorism

Corruption

Organised Crime

External Security Situation

International Terrorism

Chapter 5 - Military Structure & Defence Industry

Armed Forces

Table: Regional Armed Forces (including conscripted) 2006

Defence Posture

Defence Reform

International Deployments

Table: Italy Foreign Deployments

Co-ordination And Joint Operations

Table: Selected Training Events/Exercises In Which Italy Took Part In 2004

Weapons Of Mass Destruction

Chapter 6 - Market Structure

Arms Trade Overview

Imports

Exports

Industry Trends & Developments

Table: Italy Defence Key Players

Procurement Trends & Developments

Table: Recent Procurement Contracts Won

Chapter 7 - Industry Forecast Scenario

Army Enlargements

Table: Army Enlargements

Government Expenditure on Defence Industry

Table: Government Expenditure On Defence Industry

Key Risks To BMI’s Forecast Scenario

Chapter 8 - Macroeconomic Forecast

Growth Rebound To Cool A Little In Second Half

Table: Italy – Macroeconomic Forecasts

Chapter 9 - Company Profiles

AgustaWestland

Alenia Aeronautica

Avio

Fincantieri

Finmeccanica

MBDA

Chapter 10 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Defence Industry

Sources

Chapter 11 - Appendix A: Risk Ratings Methodology

Conflict Risk Methodology

Terrorism Risk Methodology

Physical Safety Risk Methodology

Overall Risk Rating

State Vulnerability Index Methodology

Competitive Landscape for European Defence & Security: Sample of  
Companies Ranked

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Rankings and Competitive Landscapes by production and sales; market share and change on previous year; number of employees, ownership structure and year established. Also includes analysis of company expansion, export and investment strategies.

Network of Defence & Security Sources

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BMI's European Defence & Security Reports are based on an extensive network of multilateral organisations, government departments, automotive industry associations, chambers of commerce and company reports. Information sources include: