Italy is a constitutional monarchy governed by Prime Minister Giovanni Giolitti under King Victor Emmanuel III. Mass migration from the agricultural South to the industrializing North brings social unrest and the rise of left-wing political groups in industrial centers. Italy goes to war with Turkey, conquering part of Libya and the Dodecanese Islands. As tensions rise in Europe, Giolitti resigns.
Antonio Salandra replaces Giolitti as premier. Lured by promises of territorial rewards, Italy joins the Allies in World War I. Vittorio Orlando becomes prime minister. After two years of serious defeats, Italy's poorly equipped army wins a great victory in 1918 and forces Austria-Hungary to surrender. Unhappy with the Allies' only partial fulfillment of prewar promises, Orlando resigns.
Political and social unrest fuel the extremist Fascist movement which advocates aggressive nationalism. Parliament dissolves. Fascist leader Benito Mussolini organizes the National Fascist Party and directs a march on Rome, promising restoration of social order and political greatness. Mussolini is made premier by the king who, with little effective power, remains the titular head of state.
The Fascists gain an absolute majority in 1924 elections. Mussolini crushes opposition, transforming the government into a dictatorship supported by a secret police and Fascist militia. Industry and labor are subject to strict controls. Adopting the title of Duce, or "Leader," Mussolini directs the erection of monumental buildings and extols Italy's greatness. Parliamentary government ends.
The Fascists reorganize the economy to focus on self-sufficiency. Twenty-two guilds, represented in the National Council of Corporations, administer sectors of the economy. The government manages the banks and forms several holding companies, including the Industrial Reconstruction Institute (IRI). Italy recognizes Catholicism as its state religion and the Vatican as sovereign and independent.
Mussolini strengthens Italy's ties with Germany through the Rome-Berlin Axis, a military and political alliance later joined by Japan, Hungary, Bulgaria, Romania, Slovakia, and Croatia. Italy invades Albania and launches claims for Tunisia, the French island of Corsica, and the city of Nice. Mussolini abolishes the Chamber of Deputies, replacing it with his own Chamber of Fascii.
Italy joins Germany in declaring war on France and Great Britain, then suffers defeat at the hands of the British and the Greeks in Europe and of the Ethiopians and the British in East Africa. By 1941, Italy is at war with the Soviet Union and the United States. Italy falls under greater German control, deporting Italian Jews to Nazi death camps and tying its industry to Germany's war machine.
Italy, its army shattered, relinquishes its African colonies. Discontent among Italians culminates in a Fascist rebellion against Mussolini, his dismissal by the king, the dissolution of the Fascist Party, and the appointment of Fascist Pietro Badoglio as premier.
Italy signs a secret armistice with the Allies and declares war on Germany. Rescued by German paratroopers, Mussolini forms a small Fascist regime in Northern Italy. When the Allies enter Rome, the king retires in favor of his son, Prince Umberto, and Prime Minister Badoglio resigns, replaced by Socialist Ivanoe Bonomi. Allied-occupied areas of Italy are returned to Italian control.
Christian Democrat Alcide De Gasperi heads a coalition government which, at the behest of the United States, excludes the Communists. The king is exiled, and De Gasperi stays on as prime minister under a new republican constitution with a weak executive. Relying on U.S. aid for reconstruction, the state takes a major role in the economy through holding companies, emphasizing industry and exports.
Rapid Northern industrialization sparks an "economic miracle"; the South lags behind despite government efforts to draw investment. The government owns major commercial and industrial firms. The Christian Democrats head a series of coalition governments without an absolute majority. Italy signs the Treaty of Rome in '57, and the European Economic Community (EEC) is born.
A low-value lira and low wages allow strong export-led growth. As required by the Treaty of Rome's provisions, Italy moves to free trade with other EEC members. The left gains political support. The government controls key economic sectors, but its investments and subsidies enable the rise of several private companies. Inflation and worker discontent signal the end of the economic boom in 1962.
Strong international competition and pressure from labor for higher wages slow economic expansion. An austerity program to combat inflation brings a drop in investment. Divisions within the Christian Democratic party under Prime Minister Aldo Moro expose the frailty of his government's coalition with the Socialists. Students and workers stage violent protests of economic and social conditions.
Labor protests bring contract and wage renegotiation. The economy enters recession as the higher cost of inputs and the inefficiency of state-owned enterprises make Italian goods less competitive. Inflation rises. Crime rates and terrorism by extremist groups rise as well. The Communists make gains in local elections. A series of governments fails to bring political, economic, or social stability.
The Communists join forces with other opposition groups, and the left's power grows. Republican Giovanni Spadolini becomes prime minister. Austerity programs pull the economy out of recession, but inflation and unemployment remain high, and the trade balance turns negative. Italy joins the European Monetary System (EMS). Extremists terrorize the country with murders, kidnappings, and bombings.
Socialist Prime Minister Bettino Craxi, the longest running premier since 1945, heads a coalition government. Craxi cracks down on organized crime and continues an austerity program to revive the sluggish economy, but resigns in 1987 due to allegations of corruption. Italy, its economy half owned by the government, struggles to remain internationally competitive.
The Christian Democrats return to head a coalition government under Giulio Andreotti. As state-owned companies lose money, some begin to consider privatization. Organized crime decreases as many Mafia members are arrested, but terrorist activity by domestic and international groups continues. With its overvalued currency, high inflation, and slow economy, Italy's rank in the EEC falls.
To reduce Italy's deficit and public debt in order to qualify for the European Monetary Union (EMU), Prime Minister Giuliano Amato privatizes industry and infrastructure. A major corruption investigation implicates many leading politicians, bringing political turmoil. Two coalitions emerge, one center-right and one center-left. Media magnate Silvio Berlusconi briefly heads a right-wing government.
Romano Prodi of the leftist Ulivo coalition forms a government but resigns when Italians protest his austerity measures which ultimately enable Italy to join the EMU. Former Communist Massimo D'Alema becomes prime minister of a seven-party government which lasts less than two years. D'Alema continues privatization, and while economic growth rises, it still lags behind that of other EMU members.
Silvio Berlusconi is reelected despite concerns of conflicts of interest with his extensive business affairs. Relations with other EU members are volatile. Genoa hosts the 2001 G-8 summit of industrial nations, at which protests turn violent. The domestic atmosphere is charged due to economic stagnation, political polarization, and fears of renewed political violence.
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