Italy became a nation-state in 1861 when regional states on the Italian peninsula united. Benito Mussolini formed a fascist dictatorship in the 1920s, ending parliamentary governance. After Italy was defeated in World War II, Italy became a democratic republic.
In the post-War period, Italy saw an economic revival, with much of the economy in the northern half of the country characterized by industry and the southern half mainly by agriculture. In recent years, economic growth and the labor market have been deteriorating, with youth unemployment averaging 40 percent, as of 2014, and the public debt growing to 134.1 percent of GDP. The country's GDP also declined 10 percent from 2007 to 2014.
As of 2014, an estimated 17 percent of Italy's GDP is produced by an underground economy, and tax evasion is a major problem. Money laundering and smuggling by organized crime are major problems as well. Italy is a primary European gateway for Latin American cocaine and Southwest Asian heroin, and a large consumer of these products.
Tens of thousands of illegal immigrants enter Italy every year due to Italy's long coastline and developed economy. Italy has many historically active volcanoes; a few, including Etna and Vesuvius, have been active in recent years and pose a continuing threat to the country.