Situated in southern Europe, Italy is a peninsula of 301,230 square kilometers (116,275 square miles) that includes two large islands: Sicily, which is separated by the Straits of Messina (only 3 kilometers, or less than 2 miles, wide), and Sardinia, which lies between Italy and Spain, separated by the Tyrrhenian Sea. On the north, the Alpine arc separates Italy from France, Switzerland, Austria, and Slovenia. Enclosed within the Italian territory are the Holy See (the Vatican City) and the Republic of San Marino (39 square kilometers; 15 square miles).

Italy had a population estimated in July 2003 at 57,998,353. The capital is Rome, with more than 2.5 million inhabitants. Important cities include Milan (3.5 million inhabitants), Turin (2 million inhabitants), Naples (3 million inhabitants), and Palermo (more than 1 million inhabitants). Other cities of significance include Bologna, Florence, and Bari.

The Italian currency was the lira, but like ten other European countries, on January 1, 2002, the euro became the only legal tender...