ITALY IN EUROPEAN-UNION

The emerging economic model in Europe challenges key features of the p ost-war Italian political economy: the state's extensive involvement i n industry; the cumbersome regulatory framework; the use of public exp enditure to secure political consent; and devaluation as art economic fool to achieve competitiveness. Political modernisation is also impor tant and the collapse of the cross-party agreement on constitutional r eform in 1998 indicates how difficult change is in this area.