people were registered with unemployment offices, although there were many other
unemployed who had not registered. It is also worth noting that in northern Italy alone,
more than one million workers had been employed in companies which were directly or
indirectly linked to the arms industry, and these companies were now inactive and
awaiting conversion.
The gravity of the situation, of which inflation and unemployment were only the two
most obvious facets, forced the ruling politicians to implement a number of temporary
measures in order to face the most pressing priorities although, in so doing, they lost sight
of an overall strategic plan which alone could have ensured a lasting success. Moreover,
as already mentioned with regard to monetary policies, the contrasting ideological
positions of the government coalition members (Christian Democrats, Liberals, Radical
Actionists, Socialists and Communists) led to interminable delays in taking important
decisions. The situation became somewhat clearer between 1946 and 1947, when Italy’s
position within the zone of Western influence was assured.
The indisputable hegemony of the United States in the market economy was signalled
by the retreat of the pound sterling and the rise of the US dollar as an international
currency. In accordance with the principles of economic co-operation and integration
(principles which after the Second World War were followed much more vigorously than
after the First World War), Italy, together with the other major Western European
countries, participated in the creation of international institutions such as the International
Monetary Fund, set up through the Bretton Wood agreements. The establishment of the
Fund was dictated by the need to end monetary devaluation as a tool of trade competition
and to promote a process of trade liberalization by overcoming the clearing system. This
was to some extent facilitated by the political changes which saw the ousting of the
communist and socialist Left from the executive when De Gasperi formed his fourth
government in May 1947, in which liberal politician—and later President of the Republic
Luigi Einaudi figured prominently. At this point, the position of Italy in the international
context became clear, and it was able to benefit from the Marshall Aid Plan (which was
announced in June 1947) and to adopt an unambiguous economic policy. Such choices
appeared appreciated by the electorate when a year later, in the elections of April 1948,
the Left suffered a massive defeat.
Among the first measures to be taken by the De Gasperi—Einaudi government were
those relating to the Italian currency. New rules aimed at regulating compulsory
payments set aside by banks with the issuing institution were established, and the official
discount rate was drastically increased. A credit squeeze and a careful policy of
containing the public deficit allowed the country to defeat inflation and to pave the way
towards the so-called economic miracle of the 1950s.
However, even if the government generally favoured a free market economy, there
was also state intervention. In fact, the most peculiar feature of the Italian case was
probably the combination of free market measures, aimed at gradually removing the few
forms of control introduced by Fascism, with measures aimed at consolidating the
impressive apparatus of public enterprises which had been established after the 1929
economic crisis. The Institute for Industrial Reconstruction (IRI) continued to play an
important role and fully participated in the reconstruction activity, giving the state a
direct presence in the process. The international economic growth ignited by the Korean
war at the beginning of the new decade found the Italian economy with the right
Encyclopedia of contemporary italian culture 662