🇮🇹 Italy

Italy's demographic collapse is the EU's most extreme case study in hidden vulnerability. Sustained net emigration of 30,000–120,000 young people per year over the past decade means the youth unemployment rate (18.4%) DRAMATICALLY understates the dysfunction — the denominator has been hollowed out. The South exports its graduates to Milan, and Milan exports them to London, Berlin, and Paris. The old-age dependency ratio at 39% is locked in for decades: the missing workers are gone. AI will worsen this by destroying the southern entry-level services that nominally anchored graduates to their home regions, accelerating the exodus of the exact demographic Italy needs to absorb automation.

Italy's AI strategy is essentially the PNRR slush fund sprinkled with vague digitalization targets. There is no serious industrial AI policy, no retraining infrastructure for an aging workforce, and regulatory fragmentation between Rome and Brussels. The country has piloted some AI sandboxes but lacks the digital backbone to deploy them — and Stellantis's wobbling automotive base removes the one industrial anchor that could pivot to AI-augmented manufacturing.