Obbligazione Italia 3.625% ( US465410BD94 ) in USD

Emittente Italia
Prezzo di mercato 100 USD  ▲ 
Paese  Italia
Codice isin  US465410BD94 ( in USD )
Tasso d'interesse 3.625% per anno ( pagato 2 volte l'anno)
Scadenza 14/09/2007 - Obbligazione è scaduto



Prospetto opuscolo dell'obbligazione Italy US465410BD94 in USD 3.625%, scaduta


Importo minimo /
Importo totale /
Descrizione dettagliata L'Italia è una repubblica parlamentare situata nell'Europa meridionale, famosa per la sua storia, arte, cultura e gastronomia.

The Obbligazione issued by Italia ( Italy ) , in USD, with the ISIN code US465410BD94, pays a coupon of 3.625% per year.
The coupons are paid 2 times per year and the Obbligazione maturity is 14/09/2007







PROSPECTUS SUPPLEMENT
(To Prospectus dated March 14, 2002)
US$3,000,000,000
Republic of Italy
3.625% Notes due 2007
The Republic of Italy
Italy is a foreign sovereign government. It is a founding member of the European Union and one of twelve
countries included in the European Economic and Monetary Union.
The economy of Italy, as measured by its 2001 gross domestic product, is the sixth largest in the world.
The Notes
The Notes will be direct, general and unconditional obligations of the Republic of Italy and will rank pari
passu with all other unsecured and unsubordinated obligations of Italy.
We will pay interest on the Notes on March 14 and September 14 of each year, commencing on March 14,
2003.
The Notes will be redeemed at 100% of their principal amount on September 14, 2007.
Proposed Trading Format
We have applied to list the Notes on EUROMOT (Mercato Telematico Eurobbligazioni), MTS (Mercato
Telematico Secondario all'Ingrosso dei Titoli di Stato) and the Luxembourg Stock Exchange in accordance with
the rules thereof.
Initial Price
Underwriting
Proceeds to
to Public(1)
Discount(2)
Italy(1)
Per Note ********************
99.821%
0.10%
99.721%
Total************************
$2,994,630,000
$3,000,000
$2,991,630,000
(1) Plus accrued interest, if any, from and including September 4, 2002.
(2) Italy has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the
U.S. Securities Act of 1933.
These securities have not been approved or disapproved by the Securities and Exchange Commission of the
United States or any state securities commission. Neither the Securities and Exchange Commission nor any state
securities commission has passed upon the accuracy or adequacy of this prospectus supplement or the
prospectus to which it relates. Any representation to the contrary is a criminal offense.
Joint Bookrunning Lead Managers
Merrill Lynch & Co.
Salomon Smith Barney
UBS Warburg
ABN AMRO
Banca IMI
Credit Suisse First Boston
Deutsche Bank
Goldman Sachs International
Lehman Brothers
Nomura Securities
UBM-UniCredit Banca Mobiliare
The date of this Prospectus Supplement is August 29, 2002.


No person has been authorized to give any information or to make any representations other than
those contained or incorporated by reference in this Prospectus Supplement or the Prospectus, and, if
given or made, such information or representations must not be relied upon as having been authorized.
This Prospectus Supplement, the Prospectus and any other documents incorporated by reference herein
do not constitute an offer to sell or the solicitation of an offer to buy any securities other than the
securities to which they relate or an offer to sell or the solicitation of an offer to buy any such
securities in any circumstances in which such offer or solicitation is unlawful. Neither the delivery of
this Prospectus Supplement, the Prospectus and any other documents incorporated by reference herein
nor any sale made hereunder shall, under any circumstances, create any implication that there has
been no change in the affairs of the Republic of Italy since the date hereof or that the information
contained or incorporated by reference herein is correct as of any time subsequent to its date.
Table of Contents
Prospectus Supplement
Page
Summary of the Offering ***************************************************************** S-4
Use of Proceeds************************************************************************* S-6
Recent Developments ******************************************************************** S-6
Description of the Notes ****************************************************************** S-10
Global Clearance and Settlement *********************************************************** S-14
Taxation ******************************************************************************* S-18
Underwriting *************************************************************************** S-21
Official Statements ********************************************************************** S-22
Validity of the Securities ***************************************************************** S-22
General Information ********************************************************************* S-23
Prospectus
Page
Use of Proceeds*************************************************************************
4
Description of Debt Securities *************************************************************
5
General******************************************************************************
5
Nature of Obligation; Negative Pledge ****************************************************
6
Italian Taxation; Additional Amounts *****************************************************
6
Certain United States Federal Income Tax Consequences *************************************
6
Default; Acceleration of Maturity ********************************************************
8
Redemption **************************************************************************
8
Amendments *************************************************************************
8
Governing Law; Consent to Service ******************************************************
9
Description of Warrants ******************************************************************
11
General******************************************************************************
11
Governing Law; Consent to Service ******************************************************
11
United States Taxation *****************************************************************
11
Plan of Distribution**********************************************************************
12
Official Statements **********************************************************************
12
Validity of the Securities *****************************************************************
13
Authorized Representative ****************************************************************
13
Where You can Find More Information******************************************************
13
This Prospectus Supplement should be read together with the accompanying Prospectus, dated March 14,
2002, of the Republic of Italy and any other documents incorporated by reference herein. The Prospectus
contains information regarding the Republic of Italy (``Italy'') and a description of certain terms of Italy's
S-2


securities. Further information regarding Italy and the Notes offered by this Prospectus Supplement, which
constitute a separate series of the debt securities of Italy being offered from time to time pursuant to the
Prospectus, may be found in our registration statement (no. 333-84288), on file with the U.S. Securities and
Exchange Commission (the ``Commission'').
The distribution of this Prospectus Supplement, the Prospectus and any other documents incorporated by
reference herein and the offering of the Notes in certain jurisdictions may be restricted by law. Persons who
come into possession of this Prospectus Supplement or the Prospectus should inform themselves about and
observe any such restrictions. This Prospectus Supplement and the Prospectus do not constitute, and may not
be used in connection with, an offer or solicitation by anyone in any jurisdiction in which such offer or
solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so
or to any person to whom it is unlawful to make such offer or solicitation. See ``Underwriting.''
Italy accepts responsibility for the information contained in the Prospectus Supplement, in the Prospectus
and in any other documents incorporated by reference herein. To the best of the knowledge and belief of Italy
(which has taken all reasonable care to ensure that such is the case), the information contained in the
Prospectus Supplement, in the Prospectus and in any other documents incorporated by reference herein is in
accordance with the facts and does not omit anything likely to affect the import of such information.
IN CONNECTION WITH THIS OFFERING, UBS AG, ACTING THROUGH ITS BUSINESS GROUP
UBS WARBURG (THE ``STABILIZING MANAGER''), OR ANY PERSON ACTING ON ITS BEHALF,
MAY OVER-ALLOT OR EFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET
PRICE OF THE NOTES AT A LEVEL HIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL
FOR A LIMITED PERIOD AFTER THE ISSUE DATE. HOWEVER, THERE IS NO OBLIGATION ON
THE STABILIZING MANAGER, OR ANY OF ITS AGENTS, TO DO THIS. SUCH TRANSACTIONS
MAY BE EFFECTED ON THE LUXEMBOURG STOCK EXCHANGE, EUROMOT (MERCATO
TELEMATICO EUROBBLIGAZIONI) OR THE MTS (MERCATO TELEMATICO SECONDARIO
ALL'INGROSSO DEI TITOLI DI STATO), IN THE OVER-THE-COUNTER MARKET OR OTHERWISE.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME AND MUST BE
BROUGHT TO AN END AFTER A LIMITED PERIOD.
Enforcement of Civil Liabilities
Italy is a foreign sovereign government. Consequently, it may be difficult for investors to obtain or
realize upon judgments of courts in the United States against Italy. Italy will irrevocably submit to the
jurisdiction of the Federal and State courts in The City of New York. Italy will irrevocably waive any
immunity from the jurisdiction of such courts, to the extent permitted by Italian law, but not execution or
attachment or process in the nature of such jurisdiction. Italy will waive any objection to venue, in connection
with any action arising out of or based upon the Notes brought by any holder of Notes. Italy reserves the
right to plead sovereign immunity under the United States Foreign Sovereign Immunities Act of 1976 with
respect to actions brought against it under United States Federal securities laws or any state securities laws.
In the absence of a waiver of immunity by Italy with respect to these actions, it would not be possible to
obtain a United States judgment in such an action against Italy unless a court were to determine that Italy is
not entitled under the Immunities Act to sovereign immunity with respect to such action. Enforceability in
Italy of final judgments of U.S. courts obtained in actions based on the civil liability provisions of the
U.S. federal securities laws is subject, among other things, to the absence of a conflicting final judgment by
an Italian court or of a previously instituted action pending in Italy among the same parties and arising from
the same facts and circumstances and to the Italian courts' determination that the U.S. courts had jurisdiction,
that process was appropriately served on the defendant, and that enforcement would not violate Italian public
policy. In general, the enforceability in Italy of final judgments of U.S. courts obtained would not require
retrial in Italy. In original actions brought before Italian courts, there is doubt as to the enforceability of
liabilities based on the U.S. federal securities laws. The Italian courts may enter and enforce judgments in
foreign currencies. See ``Description of Debt Securities -- Governing Law; Consent to Service'' in the
Prospectus.
S-3


SUMMARY OF THE OFFERING
Issuer *********************** The Republic of Italy.
Securities Offered************* $3,000,000,000 principal amount of Notes due 2007.
Maturity Date **************** September 14, 2007.
Redemption Basis ************* At par.
Interest Rate ***************** The Notes will bear interest at the rate of 3.625% per annum, payable
semi-annually in arrears in two equal payments.
Interest Payment Dates ******** March 14 and September 14 of each year commencing March 14, 2003
for the period commencing from and including September 4, 2002, as
described herein.
Markets ********************* The Notes are offered for sale in those jurisdictions in the United States,
Europe and Asia where it is legal to make such offers.
See ``Underwriting.''
Further Issues **************** Italy reserves the right from time to time without the consent of the
holders of the Notes to issue further securities having identical terms
and conditions, so that such securities shall be consolidated with, form a
single series with and increase the aggregate principal amount of, the
Notes.
Listing ********************** Application has been made to list the Notes on the Luxembourg Stock
Exchange, EUROMOT (Mercato Telematico Eurobbligazioni) and MTS
(Mercato Telematico Secondario all'Ingrosso dei Titoli di Stato).
Form and Settlement ********** The Notes will be issued in the form of one or more global notes, in
fully registered form, without coupons, which will be deposited on or
about September 4, 2002 (the ``Closing Date'') with Citibank, N.A. as
custodian for, and registered in the name of Cede & Co. as nominee of,
The Depository Trust Company (``DTC''). Except as described in this
Prospectus Supplement, beneficial interests in the global note will be
represented through accounts of financial institutions acting on behalf of
beneficial owners as direct and indirect participants in DTC. Investors
may elect to hold interests in the global note through DTC in the United
States or through Euroclear Bank S.A./N.V. (``Euroclear Bank''), as
operator of the Euroclear System (``Euroclear'') or Clearstream Banking,
soci´et´e anonyme (``Clearstream''), in Europe, if they are participants in
such systems, or indirectly through organizations that are participants in
such systems. Euroclear and Clearstream will in turn hold interests in
the global notes as indirect participants in DTC. Except as described in
this Prospectus Supplement, owners of beneficial interests in the global
note will not be entitled to have Notes registered in their names, will not
receive or be entitled to receive physical delivery of Notes in definitive
form and will not be considered holders of the Notes under the Notes or
the fiscal agency agreement governing the Notes. See ``Description of
the Notes -- Form, Denomination and Registration.''
It is expected that delivery of the Notes will be made, against payment
therefor in same-day funds, on or about September 4, 2002.
S-4


Withholding Tax ************** Principal of and interest on the Notes are payable by Italy without
withholding or deduction for Italian withholding taxes subject to certain
exceptions, including withholding taxes that may be imposed pursuant to
the proposed EU Directive on the taxation of savings income, to the
extent set forth in this Prospectus Supplement and in the Prospectus
under the heading ``Description of Debt Securities -- Italian Taxation.''
Redemption ****************** The Notes will not be redeemable prior to September 14, 2007.
Governing Law *************** The Notes shall be governed by, and interpreted in accordance with, the
laws of the State of New York.
S-5


USE OF PROCEEDS
The net proceeds to us from this offering will be approximately $2,991,630,000. Those proceeds will be
used for general purposes of the Italian Government, including debt management purposes.
RECENT DEVELOPMENTS
Italy's real GDP grew at a seasonally adjusted rate of 0.2 per cent both during the second quarter of
2002 and for the year ended June 30, 2002, based on ISTAT data. Italy's GDP grew by 1.8 per cent in 2001.
Italy's economic growth during 2001 and the first half of 2002 was negatively affected by several external
factors, including a slowdown in the global and U.S. economies, and the volatility of financial markets,
somewhat offset by sustained internal demand and investments.
Italy's seasonally adjusted average unemployment rate continued to decline and was at 9.1 per cent
during the first six months of 2002, according to ISTAT data, down from 9.5% and 10.6% during 2001 and
2000, respectively, mainly as a result of an increase in the number of female workers.
Based on ISTAT data, consumer prices during July 2002 increased at an annual rate of 2.2 per cent,
equaling the annual rate in the previous month. Inflation in Italy, as measured by the consumer price index,
was at 2.7 per cent in 2001, compared to 2.5 per cent in 2000.
Italy's trade surplus improved during 2001 reaching 49,934 million, compared to 41,907 million in 2000.
2003-2006 Program Document Objectives
In July 2002 the government finalized and presented to Parliament its 2003-2006 Program Document.
The Program Document is based on the assumption that real GDP is expected to grow 1.3 per cent in 2002,
primarily due to sustained domestic demand, somewhat offset by a decrease in exports. The general
Government deficit, as a percentage of GDP, is targeted at 0.5 per cent in 2002, an improvement from
1.9 per cent in 2001. The Program document assumes annual deficit reductions, with a substantially balanced
budget achieved in 2004-2005 as a result, inter alia, of an increase in primary surplus to 5.4 per cent of GDP
in 2001 and 2002 and a progressive reduction in interest payments to 5.7 per cent of GDP in 2006.
The following table sets forth information on Italy's projected general Government deficit and public
debt to GDP ratios for the years indicated, the gross domestic product and inflation assumptions underlying
the 2003-2006 Program Document, as well as historical data for 2001.
2001
2002
2003
2004
2005
2006
(Historical)
(Target)
(Target)
(Target)
(Target)
(Target)
Net Surplus /(Borrowing), as a percentage of
GDP ********************************
(2.2)
(1.1)
(0.8)
(0.3)
0.1
0.2
Primary balance, as a percentage of GDP ****
4.1
4.7
5.1
5.5
5.8
5.7
Public debt, as percentage of GDP **********
109.4(1)
108.5
104.5
99.8
97.1
94.4
GDP (% real growth rate) *****************
1.8
1.3
2.9
2.9
3.0
3.0
Inflation (% real growth) ******************
2.7
1.7
1.4
1.3
1.2
1.2
Unemployment rate (%) ******************
9.5
9.1
8.5
8.0
7.5
6.8
Source: 2003-2006 Program Document
(1) This figure does not take into account the effects of the Eurostat decision which requires Italy, among other EU member countries,
to account for receipts from certain securitization transactions as described below in ``Public Finance -- General Government
Revenues and Expenditures.''
Because the Program Document 2003-2006 is based on projections of future economic developments,
including international economic trends, there can be no assurance that the objectives of the Program
Document 2003-2006 will be attained.
S-6


Real GDP and Expenditures
The following table sets forth information relating to real GDP and expenditures for the periods
indicated.
1997(1)
1998(1)
1999
2000
2001
(millions of euro)
Real GDP ********************************* 952,050
969,130
984,567
1,012,802
1,030,910
Add: Imports of goods and services ************ 232,621
253,285
266,639
291,669
292,151
Less: Exports of goods and services *********** 267,151
276,325
277,059
309,510
311,897
Total goods and services available for domestic
expenditure **************************** 917,521
946,090
974,147
994,961
1,011,164
Domestic expenditure
Private sector consumption ***************** 562,337
580,294
594,271
610,265
616,981
Public sector consumption****************** 171,175
171,730
174,131
177,165
181,321
Total domestic consumption **************** 733,512
752,024
768,402
787,430
798,302
Gross fixed investment*********************** 179,114
186,229
196,755
209,446
214,464
Changes in inventories***********************
4,894
7,837
8,991
(1,914)
(1,602)
Total domestic expenditures **************** 917,521
946,090
974,147
994,961
1,011,164
Source: Annual Report of the Bank of Italy (2002)
(1) Lire amounts have been translated into euros at the fixed exchange rate of Lit. 1936.27 to 41.00, which took effect on January 1,
1999. For convenience, amounts for prior years have been translated at the same rate and depict the same trends as they would had
they been presented in lire.
Selected Balance of Payments Indicators 1997 through 2001
The following table illustrates the balance of payments for the periods indicated.
1997(1)
1998(1)
1999
2000
2001
(millions of euro)
Current Account ***********************************
29,341
20,444
7,692
(6,305)
(178)
Capital Account************************************
2,922
2,249
2,789
3,195
938
Financial Account ********************************** (18,279)
1,282
(8,867)
4,287
(2,889)
Errors and omissions******************************** (13,985)
(23,975)
(1,614)
(1,177)
2,129
Source: Annual Report of the Bank of Italy (2002)
(1) Lire amounts have been translated into euros at the fixed exchange rate of Lit. 1936.27 to 41.00, which took effect on January 1,
1999. For convenience, amounts for prior years have been translated at the same rate and depict the same trends as they would had
they been presented in lire.
Italy's current account showed a deficit of 40.2 billion in 2001, compared to 46.3 billion in 2000. The
improvement in Italy's current account deficit was due principally to a 47.4 billion increase in the trade
surplus on goods and also to the decrease in the deficit on income from 413.1 billion in 2000 to 411.6 billion
in 2001. These improvements were partially offset by a decrease in the surplus on services, which amounted
to 40.3 billion in 2001, compared to 41.2 billion in 2000 and by an increase in the deficit on current transfers
from 44.7 billion in 2000 to 46.7 billion in 2001.
The capital account surplus decreased from 43.2 billion in 2000 to 40.9 billion in 2001 due to
decreasing EU budget transfers, primarily those from the EU's Regional Development Fund and the European
Agricultural Guidance and Guarantee Fund.
The financial account showed a deficit of 42.9 billion in 2001, compared to a surplus of 44.3 billion in
2000. This was principally attributable to a net direct investment outflow of 47.4 billion in 2001, compared to
S-7


a net direct investment inflow of 41.1 billion in 2000, partially offset by a decrease in the deficit on portfolio
and derivatives investment from 423.8 billion in 2000 to 48.1 billion in 2001.
Public Finance -- General Government Revenues and Expenditures
The table below sets forth general Government revenues and expenditures for the five-year period ended
at December 31, 2001. Because of the accounting treatment adopted by Italy and following the adoption of
the European System of Accounts (ESA95), the revenues and expenditures figures for the years 1997 through
2000 presented in this prospectus supplement have been subject to revision and differ from the figures for the
same periods presented in the Description of the Republic of Italy filed as an exhibit to the annual report of
the Republic of Italy on March 14, 2002.
The Statistical Office of the European Communities, or Eurostat, published in July 2002 a decision
relating to the methods of accounting for securitizations. Pursuant to the Eurostat decision, Italy will be
required to account for receipts, aggregating approximately 46.7 billion, from certain real estate and state
lottery proceeds securitization transactions, which took place in 2001, in the three-year period 2002-2004 and
not in 2001. The general Government revenues and expenditures figures for 2001 presented in the table below
take into account the effects of the Eurostat decision. As a result of the Eurostat decision, Italy's net
borrowing for 2001 rose from 1.6% of GDP to 2.2% of GDP.
The table does not include revenues from privatizations, which are deposited into a special fund for the
repayment of outstanding Treasury securities and cannot be used to finance current expenditures. Accordingly,
proceeds from privatizations do not affect the financial balance, but do contribute to a decrease in the public
debt and consequently the ratio of public debt to GDP.
1997(1)
1998(1)
1999
2000
2001
(millions of euro, except percentages)
Expenditures
Current expenditures ******************
484,755
487,402
492,289
511,432
534,225
Total consumption**********************
188,663
188,033
196,174
208,016
224,663
of which
Wages and salaries *******************
119,109
114,450
117,739
122,810
129,028
Cost of goods and services ************
69,554
73,583
78,435
85,206
95,583
Interest expense************************
96,105
86,011
74,834
75,265
77,133
Production grants **********************
12,543
14,420
13,682
13,923
13,950
Social services*************************
177,771
181,894
190,000
195,344
202,728
Other current expenditures ***************
9,673
17,095
17,599
18,884
15,751
Capital expenditures(2) *****************
35,844
41,345
44,292
29,459
49,370
Investments ***************************
22,856
25,524
27,057
28,021
30,916
Investment grants **********************
8,996
11,402
13,144
13,090
16,427
Other capital expenditures ***************
3,992
4,420
4,091
(11,652)
2,027
Total expenditures*******************
520,598
528,747
536,581
540,891
583,595
% of GDP **************************
50.7%
49.3%
48.4%
46.4%
48.0%
S-8


1997(1)
1998(1)
1999
2000
2001
(millions of euro, except percentages)
Revenues
Current revenues**********************
482,756
491,177
511,590
529,523
553,376
Tax revenues **************************
292,246
318,848
333,805
345,600
360,344
of which
Direct taxes *************************
164,534
154,454
166,307
170,440
183,285
Indirect taxes ************************
127,713
164,394
167,498
175,160
177,059
Social security contributions *************
157,329
137,712
141,129
148,074
154,519
Revenues from capital ******************
6,328
5,392
7,163
5,599
6,095
Other current revenues ******************
26,853
29,225
29,493
30,250
32,775
Capital revenues **********************
10,120
7,372
5,574
5,105
3,421
Total revenues **********************
492,875
498,549
517,164
534,628
556,797
% of GDP **************************
48.0%
46.5%
46.7%
45.9%
45.8%
Current account surplus /(deficit) ********
(1,999)
3,775
19,301
18,091
19,151
% of GDP **************************
0.2%
0.4%
1.7%
1.6%
1.6%
Net borrowing ************************
27,723
30,198
19,417
6,263
26,798
% of GDP **************************
2.7%
2.8%
1.8%
0.5%
2.2%
Primary balance **********************
68,383
55,813
55,417
69,002
50,335
% of GDP **************************
6.7%
5.2%
5.0%
5.9%
4.1%
GDP (nominal value) ****************** 1,026,285
1,073,019
1,108,497
1,164,767
1,216,583
Source: For the years 1997 -- 2000: Annual Report of the Bank of Italy (2002)
For the year 2001, ISTAT data published in August 2002, taking into account the effect of the Eurostat decision.
(1) Lire amounts have been translated into euros at the fixed exchange rate of Lit. 1936.27 to 41.00, which took effect on January 1,
1999. For convenience, amounts for prior years have been translated at the same rate and depict the same trends as they would had
they been presented in lire.
(2) In 2000, revenues from UMTS licenses for the year 2000 (413,815 million, or 1.2 per cent of GDP) were deducted from capital
expenditures.
General Government expenditures and revenues increased in each of 1997 through 2001. General
Government revenue increased by 4.1 per cent in 2001. As a percentage of GDP, revenues remained
substantially stable at 45.8 per cent in 2001. General Government expenditures increased by 7.9 per cent in
2001. As a percentage of GDP, general government expenditures increased to 48.0 per cent in 2001,
principally due to increases in current expenditures and to the effect of UMTS receipts in 2000. In 2000,
capital expenditures were unusually low because UMTS receipts were booked as negative capital
expenditures. Interest expense as a percentage of GDP decreased by 0.2 percentage points, to 6.3 per cent in
2001. Capital expenditures as a percentage of GDP (excluding receipts from UMTS licenses) increased to
4.1 per cent in 2001.
The following table sets forth the composition of tax revenues for each of the five fiscal years ended
December 31, 2001.
1997(2)
1998(2)
1999
2000
2001
(millions of euro)
Direct taxes(1)
Personal income tax****************************
94,306
103,406
114,661
113,970
119,362
Corporate income tax **************************
22,881
21,787
29,759
28,622
32,483
Local income tax ******************************
12,515
3,289
366
165
192
Investment income tax **************************
18,901
10,232
11,535
18,426
15,171
Other(3) **************************************
14,672
11,036
5,492
3,774
8,712
Total direct taxes ****************************** 16,3274
149,748
161,813
164,957
175,920
S-9


1997(2)
1998(2)
1999
2000
2001
(millions of euro)
Indirect taxes
VAT*****************************************
64,814
71,052
75,775
89,022
91,470
Other transaction-based taxes ********************
20,144
18,894
16,464
15,042
14,513
Production taxes*******************************
26,678
26,051
26,945
26,532
25,910
Tax on State monopolies ************************
5,468
6,061
6,398
7,357
7,305
National Lottery *******************************
5,908
6,813
11,701
8,887
7,722
Others ***************************************
891
799
701
679
639
Total indirect taxes***************************** 123,902
129,669
137,983
147,519
147,558
Total taxes(4) ********************************* 287,176
279,417
299,797
312,476
323,478
Source: Annual Report of the Bank of Italy (2002)
(1) The data presented is prepared for the State sector budget and does not correspond precisely to the general government budget
figures contained in the table entitled ``General Government Revenues and Expenditures under ``--Revenues and Expenditures'',
primarily because the latter include indirect taxes levied by regional and local governments.
(2) Lire amounts have been translated into euros at the fixed exchange rate of Lit. 1936.27 to 41.00, which took effect on January 1,
1999. For convenience, amounts for prior years have been translated at the same rate and depict the same trends as they would had
they been presented in lire.
(3) The taxes classified as ``other'' are non-recurring and, accordingly, this item is highly variable.
(4) These figures do not take into account the effects of the Eurostat decision which requires Italy, among other EU member countries,
to account for receipts from certain securitization transactions as described above.
Direct taxes receipts increased by 6.6 per cent in 2001 due to the increase of personal income, corporate
and other tax receipts that are non-recurring, partially offset by a decrease in investment income tax due to
the decline in share prices. The 4.7% increase in personal income tax receipts in 2001 was as the result of an
increase in the overall size of the work force and an increase in gross wages and salaries for full-time
employees. The 13.5% increase in corporate income tax in 2001 is attributable to higher corporate profits in
2000, slightly offset by the lowering of the standard tax rate from 37 to 36 per cent.
Indirect taxes include VAT, excise duties, stamp duties and other taxes levied on expenditures. Indirect
tax receipts declined from 12.7 per cent of GDP in 2000 to 12.1 per cent of GDP in 2001.
Summary External Debt
Italy's external debt, which is debt initially incurred or issued outside Italy, regardless of the currency of
denomination, totaled 481,819 as at June 30, 2002, compared to 482,653 million as at December 31, 2001
and 472,563 as at December 31, 2000.
Euro/US Dollar Exchange Rate
The noon buying rate for the Euro published by the Federal Reserve Bank of New York on August 23,
2002 was 41 for US$0.9726.
DESCRIPTION OF THE NOTES
The Notes are to be issued pursuant to a fiscal agency agreement, dated as of February 6, 2002, between
Italy and Citibank, N.A., as fiscal agent. The following statements and the statements under ``Description of
Debt Securities'' in the Prospectus briefly summarize some of the terms of the Notes and the fiscal agency
agreement. This summary and the summary in the Prospectus are not complete and are qualified in their
entirety by reference to the fiscal agency agreement and to the form of the global note, described below, filed
or to be filed by Italy with the Commission.
) The Notes are to be issued in an aggregate principal amount of $3,000,000,000.
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