Despite Italy’s current economic blues, the Italian film industry is humming, with realistic prospects of reaching a whopping 40% local market share this year, meaning Cinema Italiano can even aspire to go neck-and-neck with Hollywood on its home turf.

2011 started out auspiciously with “Che bella giornata” (“What a Beautiful Day”), a mildly politically incorrect Islamic-terrorism-themed laffer that pulverized box office records, ousting “Avatar” as the country’s top opener with a $24 million five-day first frame in January.

Pic stars TV comic Checco Zalone as a Milan Duomo security guard with the hots for an Arab girl who is hatching a plot to blow up the famous Madonna on the cathedral’s spire. Produced by Pietro Valsecchi’s Taodue Film for Medusa, and helmed by Gennaro Nunziante on a $6.6 milllion budget, “Beautiful Day” went on to score more than $60 million in Italy, beating “Life Is Beautiful” as the country’s all-time local hit.

Another January hit, “Qualunquemente” (“Whatsoeverly”), a satire about a flashy pol who loves sex and hates justice, opened at $7.4 million, the best opening weekend for RAI Cinema’s 01 Distribution, and ended up pulling close to $20 million just as Silvio Berlusconi’s sex scandal snowballed.

Helmed by Giulio Manfredonia and produced by Domenico Procacci’s Fandango in collaboration with RAI Cinema, “Whatsoeverly” stars comic Antonio Albanese as a corrupt businessman who goes into politics using the campaign slogan “I have no dream, but I like a bit of tail.”

In the first eight weekends of 2011, a steady rollout of local titles, mostly comedies, ignited the local box office share to soar to unprecedented levels of nearly 65%, with Italo pics almost systematically taking the top slot.

Naturally, it’s been downhill since. But the local share of Italo box office in June was still more than 40% for the first semester, suggesting it could hit the 40% mark for the full year.

“In a time of globalization, Italy’s box office numbers confirm that our audiences are increasingly seeking product rooted in a local identity,” says Riccardo Tozzi, president of the Italo motion picture association Anica, at a recent Rome confab.

Tozzi, who heads prominent Italo shingle Cattleya in which U holds a stake, cautions the way forward is not to ape Hollywood by trying to make effects-laden pics, but to stay focused on the basic elements which made Cinema Italiano great in the past.

“Our movies click when they tell stories about the human condition, which people (at home and abroad) can connect with,” he says. “This is the type of cinema we can export.”

Also keeping the Italo film biz buoyant are new tax breaks for film production that are reshaping the economics of the biz, luring equity investors in the sector and seeking to attract more foreign shoots.

Still, everyone in the Italian industry knows the impressive market share for Cinema Italiano has been largely due to a clutch of comedies — albeit increasingly more sophisticated than the low-grade laffers Italy churned out in the past. They have capitalized on the country’s collective depression in the likely final stretch of the Berlusconi era.

But the craving for homegrown comedies does not rep a solid cornerstone.

“Comedies cannot be our only way to tell stories,” warns producer Procacci, presenting the lineup of his Fandango shingle in July. “They are fine, if they are done well; but they must not become a constriction, because this trend is not going to last forever.”

Procacci says the Italo laffers that perform best at the local box office are the ones that struggle most to travel. Strangely, the country’s biggest recent exports — Marco Bellocchio’s “Vincere,” Luca Guadagino’s “I Am Love” and Michelangelo Frammartino’s “Le quattro volte” — are all dramas which, in varying degrees, underperformed at home.

In Venice, Fandango has a satirical sci-fier titled “L’ultimo terrestre” (“The Last Earthling”) by graphic novelist Gianni Pacinotti (aka Gipi), marking the only debut feature in the Lido competish. According to Procacci, the film depicts “a country incapable of imagining a different future for itself.”

Cattleya has two titles vying for a Golden Lion, both dramas. The first is Emanuele Crialese’s timely “Terraferma,” about the anthropological impact caused by North African immigration on the inhabitants of a small isle off the coast of Sicily. The other is titled “Quando la notte” (“When the Night”), about a fragile young single mother and a tough mountain guide who become emotionally entangled after an accident in the Italian Alps. It is directed by Cristina Comencini.

Italy’s three Venice competish titles are all backed by RAI Cinema, the film arm of Italo pubcaster RAI which has, significantly, halved its investments in foreign product over the past few years.

“Italian movies are our market drivers these days,” said RAI Cinema managing director Paolo Del Brocco, presenting his slate in June.

Italo pics launching from the Lido and other upcoming auteur Italian titles with potential to play quite widely — including Paolo Sorrentino’s yet-to-be-released Sean Penn starrer “This Must Be the Place” — will be key indicators of whether Italy’s current love affair with local movies can become “serious” and long-lasting, or just a fling.

Venice Film Festival: Italian Cinema
Italians lavish love on their comedies | Fresh coin brightens Italo picture | Venice verve