Italian federalism in the balance: suspended between European integration and domestic devolution

This chapter first describes the historical process of the transition of the Italian state from its pre-1948 unitary form to the new Italian Republic’s asymmetrically regionalized system comprised of ‘special status’ and ‘ordinary status’ regions and strongly centralized finances and budgetary control. In the 1990s a transition commenced to a greater degree of federalism but the 2008–9 financial crisis and its severe impact on the Italian economy have jeopardized completion of the federalist reforms and financial devolution. Moreover, to the extent that regional financial autonomy has increased in response to the financial crisis, this has been seen as a product of cost shifting from the central level and has contributed to a backlash against the move to federalism overall. The future path of reform remains uncertain, in particular while EU-level institutions continue to develop and the EU follows its own structural reform path.