Can most young people in Italy communicate in English fluently? Does their language education system in schools help them to communicate?

No.

Most of Italians (regardless of age) are not able to speak English fluently.

As others have said, there may be a few reasons behind this:

  1. Very poor school system/teachers, totally detached from reality, with maniac attention to obscure grammar rules or English literature authors who nobody (in real life) cares of. Students are forced to memorize English grammar rules like monkeys, without actually being able to train and speak the language. Soon after school finishes, the difference between “poisonous” and “venomous” as well as the “Rhymes of the Ancient Mariner” are quickly forgotten and students remain still unable to speak the language. I can only assume that this occurs because: (a)the selection process of teachers across the Country is very lousy (based on my experience, I believe teachers themselves have only a textbook knowledge of the language as they rarely can speak English fluently); (b)English is regarded as a low-priority topic at school from professors & parents (so much so that students are pushed to get the best grades in topics which are regarded as more important for their CV, like Italian Literature, History, Philosophy, Latin, Greek, Math, etc.); (c)Teachers are required by the School system to teach English Grammar & English Literature as they have always been taught for the past 6 decades, i.e. in a way that prevents the students to actually learn how to speak the language.
  2. Zero chances to speak English in real life. Nobody speaks English on the street, or at work or at the Universities. We have very few English-speaking white-collar immigrants sharing the workspace and requiring Italians to speak a language different than their own. Over 85% of Italian companies have less than 12 employees: almost all of them have little to zero international breadth. Only an extremely limited number of Faculties in Italy give lessons in English in the attempt to appeal to a potential wider audience (and even in that case, for example at the Milan Polytechnic, there was an infamous strike – with great resonance on the national press and media in general – from the Professors who vehemently opposed to be required to give lessons in English – very depressing). At the end of the day, Italian is regarded as the only language you need to know (on top of your hometown dialect, which is sacred in most parts of Italy for heritage/cultural reasons). This is very shortsighted from the Italians and we are all witnessing how they are paying this dearly in the worldwide markets (43% of youth unemployment as of May 2015).
  3. Everything even remotely related to entertainment is translated from English to Italian (and in an excellent way, actually): movies, documentaries, TV shows, books… everything. There is simply no incentive to learn the language as everything is already translated in Italian. If one day you ask your friends to go and watch a movie in its original English language, you may be easily considered a martian by your peers (if a Cinema with movies in English can ever be found in your city).
  4. Appropriate knowledge of English language is generally regarded as a low priority by younger and older generations alike, reflecting the “insular” culture still permeating Italians of every age.
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