Italy is a peninsular country in southern Europe that borders France, Switzerland, Austria and Slovenia. Two independent states, Vatican City and San Marino, exist within its territory. The country is mountainous, with the Apennines stretching the length of the peninsula and the Alps acting as a natural barrier between Italy and its neighbors. It also has the two largest islands in the Mediterranean, Sicily and Sardinia. Italy's core is the Po Valley, one of the most prosperous regions in Europe and the heart of the industrial north. The southern part of the country has a more agricultural profile and has traditionally been less developed. Italy's capital, Rome, was once the heart of a sprawling empire, which stretched over much of Europe, North Africa and the Levant.

After the collapse of the Western Roman Empire in the late 5th century, Italy was fragmented into small kingdoms, republics and duchies. Italy's privileged position in the heart of the Mediterranean and the wealth of its economic centers made the peninsula a territory of constant invasion, from Germanic tribes in the 5th century to the French, Austrian and Spanish empires in the 18th and 19th centuries. Moreover, Italy's rugged geography led to the development of strong regional identities. As a result, the country didn't achieve political unity until the 1860s. Italy's main geographic challenge is to preserve its territorial unity and develop a relatively stable central government while dealing with strong regional interests and fractious political forces. The eurozone crisis has intensified this challenge.

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