Italy’s Long Road to Austerity and the Paradoxes of Communism

Tobias Abse

Chapter 12 in Monetary Union in Crisis, 2005, pp 249-265 from Palgrave Macmillan

Abstract: Abstract The story of Italy’s evolution toward neo-liberalism is a long and complex one; there is no neat linear narrative comparable to the British one in which 1976 was clearly the turning point, even if the monetarist crusade gathered pace under Thatcher after 1979. Whilst the Italian turn toward neo-liberalism was bound up with the process of European integration, particularly after 1992, the external constraint was by no means the only factor pushing in the direction of monetarism or austerity. The beginnings of a turn to neo-liberalism can be traced back to the mid-1970s and have to be seen in the context of the domestic class struggle, even if external pressures, particularly from West Germany, played their part. Nonetheless, even if the 1980s were a decade full of defeats for the Italian labor movement, the full implementation of a neo-liberal program, including the relatively rapid privatization of the bulk of the vast array of enterprises associated with the massive state holding company IRI, created by Mussolini in 1933 and only officially dissolved in 2000, was only possible after the collapse of the Christian Democratic regime in 1992–93. This collapse, which was in part precipitated by Maastricht, but which also has to be linked at the international level with the end of the Cold War, and which cannot be divorced from domestic factors such as North/South divisions, discredited the whole political elite and decisively shifted the balance of forces in favor of the neo-liberal project, to the extent that two of the prime ministers of the last decade have been bankers by profession – Ciampi and Dini – and another two technocratic professors – Amato and Prodi.

Keywords: Trade Union; Public Debt; Pension Reform; European Monetary System; Maastricht Treaty (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-52400-2_12

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DOI: 10.1057/9780230524002_12

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