Just a year ago, the Italian economy looked as if it had been trampled by one of Hannibal's elephants. In March 1974, inflation was running at an annual rate of 35%, one of the worst in the industrialized world. The nation's balance of payments deficit, thrown out of kilter by quintupled oil prices, was mounting at the fearsome rate of $1 billion a month. In desperation, Italy began borrowing from other nations and sank $6 billion into debt. There was widespread speculation that the country might fall into bankruptcy—meaning that it would have to declare a moratorium on repayment of...
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