This is the script for my video posted on September 25, 2026. Watch it on TikTok.
The Italian peninsula has some of the oldest geopolitical history on the planet. You might think that modern Italy should have grown powerful as a result, but though Italy is in the G7 and is Europe’s second-largest manufacturer, the country is more defined by its burdens than its abilities. So what’s keeping Italy from being geopolitically powerful?
Modern Italy unified in the 19th century, when a political and social movement known as the Risorgimento, or Resurgence, swept across the disparate states thanks to figures like Count Camillo Benso of Cavour and Giuseppe Garibaldi.
The Italian nationalist movement came together through strategic alliances, military campaigns, and popular revolts under the leadership of the Kingdom of Sardinia and its king, Victor Emmanuel II.
The Kingdom of Italy was proclaimed in 1861, ruling first from Turin and then Florence. Italian troops only took Rome from the Pope in 1870, making it the capital the following year.
But the state faced deep regional divides between the largely industrial north and the agrarian south, all while launching colonial campaigns in East Africa and Libya.
When WWI came, Italy abandoned its old alliance with Austria-Hungary and Germany and entered on the side of the Allies in 1915. It finally won Trentino and Trieste, the Italian-speaking lands that unification had missed, but many Italians felt cheated of what they were promised, and the war left severe economic and social instability.
Benito Mussolini capitalized on this to seize power and establish his authoritarian dictatorship, which famously aligned with Germany during the Second World War.
And when that war ended and Mussolini was killed, Italians voted to abolish the monarchy and establish the modern Italian Republic.
In the mid-20th century, Italy transformed into an industrial powerhouse and experienced a massive postwar economic boom. It became a founding member of the European Economic Community, which eventually evolved into the EU, as well as NATO.
But things got worse beginning in the late 1960s. Starting with the Piazza Fontana bombing in 1969, the country faced intense politically-motivated terror attacks from both far-left and far-right groups, driven mostly by Cold War polarization and a neofascist strategy of creating tension, against a backdrop of rapid urbanization, heavy inflation, labor strikes, and general political disillusionment.
Across the postwar decades, the country's deeply rooted network of illegal kickbacks built an environment of systemic corruption, illicit party financing, and eventually open bribery. But in the early 1990s, a prosecutor in Milan named Antonio Di Pietro had local socialist official Mario Chiesa arrested for taking a bribe from a small cleaning firm, and after Chiesa's party abandoned him and called him a criminal, he began to expose the vast web of corruption that linked high-ranking politicians to the kickback scheme.
The traditional party system imploded, leading to a restructured political landscape that Italians call the Second Republic, even though the 1948 constitution itself never changed.
You can see the obvious internal factors that historically hindered Italy’s prosperity. But many of the country’s dynamics involve other countries, and energy is a perfect example. After WWII, Enrico Mattei was tasked with dismantling Mussolini’s oil agency AGIP, but instead he expanded it into a new state-owned company called Eni. Against Anglo-American oil majors’ standard 50-50 split, Mattei offered producer states up to 75% of profits, which led to deals with Egypt, Iran, and the Soviet Union.
Eni grew from a skeleton postwar operation into a workforce of tens of thousands in under two decades. Today the Italian state, through the Treasury and the state lender CDP, holds about a third of Eni and keeps effective control.
But of course energy dynamics globally have shifted since Russia’s full-scale invasion of Ukraine in 2022. Before that, Russia supplied roughly 40% of Italian gas imports, but by 2023 that collapsed to about 5%. It ticked up slightly in 2024, then fell again to under 3% of total demand by 2025. Nonetheless, Algeria became the top supplier in 2024, but other sources include Libya and Azerbaijan.
Through the Mattei Plan launched in 2024, Italy has been giving African countries billions of euros in credits, grants, and guarantees across energy, agriculture, health, and water. Critics say it's really an energy and migration instrument, which tracks, because imports make up around 96% of Italy's gas supply and nearly every European country is trying to stop importing from Russia.
Italy’s most important bilateral dynamics though is with France, who is in many ways its structural rival. This really began in 1881 when France seized Tunisia, which Italy coveted and which hosted a large population of Italian settlers. It got worse in 1940 when Italy declared war on France when it was falling to German occupation.
More recently, Italy and France have clashed over industrial issues. In 2017 the French government moved to nationalize the Saint-Nazaire shipyard rather than allow the Italian state-controlled firm Fincantieri to purchase a majority stake. There have been similar situations in the banking and telecom sectors.
The countries are also rivals in Africa. Italy particularly cares about Libya, whose affairs it’s been involved in nearly non-stop since 1911, when the Kingdom of Italy invaded Ottoman-controlled Tripolitania and Cyrenaica during the Italo-Turkish War. In 1934, Italy merged its separate North African possessions into a single unified colony called Italian Libya, and by 1939 the coastal provinces were actually integrated directly into metropolitan Italy as the Quarta Sponda, or Fourth Shore.
Italy renounced all claims to Libya under the Paris Peace Treaty after WWII, but they’ve retained substantial influence since then even under the Gaddafi regime. In 2008, Italy signed the Treaty of Benghazi promising 5b dollars of colonial compensation delivered over 20-25 years in the form of new infrastructure, in exchange for cooperation on migration and joint patrols.
For decades, Italy has faced severe migration pressure from North Africa, and while they’ve been building infrastructure to process and sometimes repatriate asylum seekers, this is one of their heaviest burdens from a geopolitical standpoint because it’s both expensive and legally and logistically complicated.
Meanwhile, births and fertility in Italy are at an all-time low, and nowhere near replacement. The fertility rate hit 1.18 children per woman in 2024, barely half what a population needs to hold steady. Only 370k children were born that year, the fewest since Italy unified, and deaths vastly outnumbered them.
At the end of 2025, Italy’s public debt was 137% of its GDP, the second-highest in the eurozone after Greece. It has to roll that debt over constantly in the bond market, which is a huge vulnerability because a spike in borrowing costs can turn the debt load into a crisis, like it nearly did in 2011. So it leans on the EU instead, and that reliance undermines a lot of its foreign policy objectives because it has to placate its European counterparts to stabilize domestically.
To that end, in 2019 Italy became the only G7 member to ever join China’s Belt and Road Initiative. But unfortunately this diversification didn’t help at all. It actually widened the trade imbalance between Italy and China. In 2022, Italian exports to China were 16.4b euros, while imports from China were 57.5b, a deficit of over 40b. Italy told China it was quitting in late 2023, and the deal lapsed the following March. Italy then backed an alternative in the India-Middle East-Europe Economic Corridor, a Western rail and shipping project meant to counter the BRI, though so far this project is mostly still on paper.
In the meantime, Italy faces pressure from NATO and the EU to spend more on defense, and to its credit in 2025 it finally hit NATO's 2% target for the first time since pledging it back in 2014. But Italy used some creative accounting to get there, reclassifying things like police and pensions, and floating the Strait of Messina bridge as dual-use infrastructure when it has little strategic value in the context of a war on Europe's southern front.
Still, from a policy standpoint, Italy is staunchly in support of its alliances. Giorgia Meloni herself has been firmly pro-NATO and pro-Ukraine, even as coalition partners like Matteo Salvini take a softer line on Russia and a harder one on the EU. Italy has donated air defense systems to Ukraine, the first of them jointly with France.
In the end, Italy can't be as powerful or geopolitically important as it would like without a stronger economy, and the constraints there are structural, like collapsing productivity, an economy built on very small firms, weak research investment, slow courts, and a shrinking workforce. Corruption and dependence on foreign partners compound the problem, but they aren't the root of it.
Keep reading
- Why does the EU exist?
- Why is Denmark so powerful when it’s so small?
- Why is tiny Luxembourg so important to Europe?
I’m writing a book called Groundwork about the buried history beneath geopolitics. Join the waitlist to hear when it has a publisher, a cover, and a release date.