ITALY: Facing a Crisis in the Dark

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Political crises occur so often in Italy that Italians—and indeed the rest of the world—hardly blink an eye when governments fall. After all, that political drama has taken place no fewer than 35 times in the past 31 years, and the life expectancy of an average Italian Cabinet is only ten months. Last week Italy's 36th government fell after only 89 days, but this time there was a major difference. The latest upheaval, which Italians quickly dubbed "the crisis in the dark," was not caused, as it so often has been in the past, by political infighting. This time it was the direct result of an economic disaster that has reduced Italy—the world's seventh largest industrial nation—to the status of Europe's sickest country, and threatens consequences beyond its borders.

Familiar Script. Despite "Here-we-go-again" skepticism on the part of most Italians, opinion leaders quickly recognized the magnitude of the new crisis.

Editorialized Turin's La Stampa: "It is perhaps the most dangerous and dramatic crisis since the war." Added Milan's Corriere Delia Sera: "This crisis is different. We are running the risk of a total collapse of the economic system."

The situation was so grave that the familiar script of revolving-door governments had a surprising variation this time. After the parties that made up the center-left government of Premier Mariano Rumor—Socialists, Social Democrats and Rumor's own Christian Democrats—were unable to agree on economic remedies, the Premier, following tradition, offered his resignation to President Giovanni Leone. But Leone refused to let Rumor give up so easily. The situation was too grave for change, he insisted. Leone thus ordered Rumor, "in the superior interest of the country," to try to form a new government.

In retrospect, it appeared that almost everyone had helped create the economic problems responsible for the collapse. A series of governments dominated by the Christian Democrats encouraged too speedy and too easy a recovery from three years of recession. Labor unions, bolstered by Socialist and Communist support, made excessive wage demands. When these were not fulfilled, they struck until the country was groggy. Affluence-seeking consumers did their best to make the dolce vita permanent. Inevitably, inflation began to spiral toward a current rate of 20% a year. New worker protests took place, including a massive "park-in" by Rome taxi drivers demanding higher fares. With money reserves dwindling as Italy tried to correct a severe balance of payments deficit, last year's oil crisis dealt the economy a devastating blow; the European country most dependent on Arab oil suddenly found petroleum prices quadrupled.

Italy has had to borrow so heavily to support the lira that annual interest runs to $700 million. Last March the International Monetary Fund made another loan of $1.2 billion, but only on the proviso that Italy put its economic house in order by reducing deficits, limiting spending, increasing taxes and holding down credit expansion.

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