ITALY: Too Damn Cautious

Italy is an ally of the U.S. in the Atlantic Pact. How effective an ally was a question raised sharply in Rome last week. ECA officials, who under their breath had long been criticizing the Italian government's economic policies, finally said out loud what it was that bothered them.

Too Much Medicine? To combat disastrous postwar inflation, Premier Alcide de Gasperi's government three years ago had launched Italy on a course of courageous fiscal austerity. The government tried to spend as little as possible on public works, clamped severe restrictions on bank credit. These measures worked to stop inflation, stiffened...

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