Italy

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The End of the Postwar Regime

The collapse of Communism in Eastern Europe precipitated changes in Italy, as well. In 1991 the Italian Communists renamed themselves the Democratic Party of the Left, downplaying their former atheism and emphasis on class conflict in favor of issues such as the environment, feminism, and the economic disparity between the country’s industrial north and the poverty-ridden south. The Socialist Party, still led by Craxi, tried to unify the left and renamed itself the Party of Socialist Unity. Meanwhile, the separatist Northern League gained popularity by criticizing central government waste and advocating a federal system that would grant more regional autonomy.

Voters showed their lack of confidence in all established parties and their desire for change in elections held in 1992. The once-dominant Christian Democrats received 29.7 percent of the vote, an all-time low. The Democratic Party of the Left (formerly the Communist Party), in second place, drew 16.1 percent, down from 26.6 percent in 1987; the Socialists were third, with 13.6 percent.

The voter backlash resulted from a combination of factors, including a poor economy and high unemployment. The dominant feeling, however, was shock at the revelations of widespread political corruption and Mafia influence at high levels of the government. The collapse of the former political parties left the judges free for the first time to pursue corruption charges. In the years that followed, thousands of individuals, including hundreds of politicians as well as judicial and business leaders, were investigated or arrested on charges that included taking bribes and granting political and economic favors. The murders of the anti-Mafia judges in Palermo in 1992 heightened the sense of revulsion with the old political parties and strengthened the pressure for political reform. The corruption charges and political scandal forced Craxi to resign as head of the Socialist Party in early 1993. In 1994, facing arrest for accepting bribes, he fled to Tunisia, where he remained in self-imposed exile until his death in 2000.

In 1993 Italian voters approved eight governmental reform referendums, which revised the country’s electoral system and ended state funding of political parties. The reforms resulted in much greater political autonomy for regional and city governments, which profoundly changed what had been a highly centralized structure in Italian politics and public administration. Soon after the elections Socialist Prime Minister Giuliano Amato resigned and was replaced by the head of the Bank of Italy, Carlo Azeglio Ciampi, who created a cross-party government of technocrats.

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In March 1994 a newly formed right-wing coalition called the Freedom Alliance was voted into power, winning 58 percent of the vote; the left-wing coalition received 34 percent of the vote, and the once-dominant centrist parties drew only 7 percent. The Freedom Alliance was composed of the new Forza Italia (“Go Italy”) party, a creation of media magnate Silvio Berlusconi; the far-right National Alliance; and the Northern League. With 25 percent of the vote, Forza Italia was the election leader, and Berlusconi was named prime minister, with the Freedom Alliance holding a majority in the Chamber of Deputies and forming the strongest force in the Senate. But Berlusconi’s coalition collapsed in December 1994 when the Northern League withdrew from the alliance. Berlusconi, who was also facing investigation on bribery charges, resigned as prime minister.

In January 1995 Lamberto Dini, Berlusconi’s treasury minister, was appointed prime minister to lead a politically neutral, transitional government. Uncontrolled public expenditure on lavish pension and welfare schemes, the massive scale of political corruption in the past, and an overlarge and unproductive public sector all contributed to soaring deficits and dangerous levels of national debt. Dini’s government passed an austerity budget to deal with Italy’s worsening economy. It also attempted to reform the regional electoral system and state pension system and to enact rules governing political access to television. Dini resigned in January 1996, but continued in office until elections were held in April.

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Center-Left Coalition Governments

The April 1996 elections brought the most profound change in Italian politics since 1947. The largest component of the winning center-left coalition, which was known as the Olive Tree, was the Democratic Party of the Left, the former Communists who until that point had been excluded from government. The coalition also included former Christian Democrats and Dini’s newly formed Italian Renewal Party. The Olive Tree gained control of the Senate and a plurality, 284 seats, in the Chamber of Deputies. Romano Prodi, an economics professor, was sworn in as Italy’s 55th postwar prime minister, pledging to cut spending and reduce unemployment.

The corruption scandals continued, engulfing prominent politicians as well as business leaders and others. Former Prime Minister Andreotti was charged with selling favors to the Sicilian Mafia in exchange for votes and political support. In 1996 Berlusconi went on trial on charges of bribing tax police to gain favorable treatment for one of his media companies. In 1997 the yearlong trial was declared null and void when the presiding judge resigned after being accused of bias against the defendant. A new trial began for Berlusconi a month later, though he continued to lead the opposition Forza Italia party. Berlusconi was accused of falsifying the price of a film company bought by one of his companies in 1989. He was found guilty in December 1997 and given a 16-month suspended sentence. He was also convicted of bribery and corruption by a Milan court in 1998.

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Economic Reforms

The great success story of the 1990s was the austerity program adopted by Prodi’s government. It produced sufficient economies in public expenditure to qualify Italy in November 1996 to reenter the European exchange rate mechanism (ERM), which the lira had been forced to abandon in 1992. After heated debate, Prime Minister Prodi won parliamentary approval the following month for a stringent budget. The budget aimed at reducing the budget deficit to 3 percent by the end of 1997 in accordance with EU requirements for participating in a common European currency. The measures taken by Prodi’s government ultimately paid off, as Italy met the requirements to join the common currency. In May 1998 Italy officially agreed to adopt the euro, the new currency, and it replaced the lira in January 2001.

The requirements for achieving European monetary union provided Italy’s political leaders with a clear agenda of monetary and financial reforms that would otherwise have been difficult to implement. The desire to play a major role in what has become the European Union has also dominated Italy’s foreign policy from the 1960s on.

In October 1998 Prodi’s government was brought down when the Democratic Party of the Left withdrew its support. Massimo D’Alema, a former Communist and head of the Democratic Party of the Left, put together a broad center-left coalition and replaced Prodi as prime minister. D’Alema resigned in December 1999 in the face of widening cracks in his ten-party ruling coalition. But he was back in office two days later, after President Carlo Azeglio Ciampi asked him to form a new government. The new government was short-lived, and D’Alema resigned for good after his center-left coalition was defeated by the center-right opposition in regional elections in April 2000. He was replaced by former prime minister Giuliano Amato, who had served as treasury minister in D’Alema’s cabinet.

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Berlusconi’s Return to Power

The center-left’s control of government came to an end in national elections in May 2001. The conservative Freedom Alliance led by Silvio Berlusconi captured a comfortable majority of seats in the upper and lower houses of parliament. Berlusconi’s winning alliance included his own Forza Italia party, which emerged from the elections as the nation’s largest single party; the neo-Fascist National Alliance; and four smaller conservative groups. The conservative groups included the Northern League, whose major agenda was stricter controls on immigration and immigrants.

Berlusconi pledged to lower taxes, streamline the state bureaucracy, and modernize Italy’s sluggish economy. However, he made little progress on those promises, and economic stagnation steadily eroded support for his government. The coalition failed to reach agreement on most of the economic reforms, and attempts to reduce the independence of the judiciary and to reform labor laws met with strong resistance. Berlusconi succeeded in pushing through a criminal justice reform bill that his critics said was deliberately engineered so that Berlusconi could avoid facing corruption charges regarding the bribery of judges. In 2004 judges applied a statue of limitations to the charges against Berlusconi, effectively acquitting him.

During Berlusconi’s term in office, Italy’s national deficit remained close to the ceiling permitted under European Union regulations, and the country’s ratio of national debt to GDP remained among the highest in the EU. Berlusconi’s decision to send about 2,700 Italian troops to Iraq in support of the United States-led occupation, launched in 2003, proved controversial and sparked protests (see U.S.-Iraq War).

In 2005 Berlusconi’s coalition suffered losses in regional elections, and several parties defected from the coalition. The move forced the prime minister to dissolve his government and form a new ruling coalition. Despite these difficulties, Berlusconi became the first prime minister since World War II to remain in office for a full term.

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Recent Elections

The April 2006 general elections were highly contested. Former prime minister Romano Prodi led a center-left coalition, l’Unione (the Union), to win a narrow victory in the voting. Berlusconi disputed the outcome, however, leading to a court review of about 5,000 contested ballots. The Supreme Court of Cassation subsequently confirmed Prodi’s victory, announcing a final margin in the lower house of parliament of fewer than 25,000 votes out of more than 38 million cast. The Union coalition, comprising nine parties, took 348 of 630 seats in the Chamber of Deputies. The coalition also claimed a razor-thin victory in the Senate, winning two more seats than the center-right coalition led by Berlusconi. Prodi formed a coalition government and was officially confirmed as prime minister in May.

Prodi and his center-left coalition strongly opposed sweeping reforms to the 1948 constitution that had gained parliamentary approval under Berlusconi. In a referendum held in June 2006, voters resoundingly rejected the proposed reforms, which would have greatly increased the powers of the prime minister and given more autonomy to the country’s 20 regions. After taking office, Prodi accelerated the pullout of Italian troops from Iraq, completed in September 2006. However, his foreign policy program lost support of some coalition members for its plan to keep Italian troops in Afghanistan. This loss of support led Prodi to submit his resignation in February 2007, but he subsequently survived confidence votes in both houses of parliament and remained in office. However, his position remained tenuous as he tried to balance the interests of his broad coalition government. After a minor party withdrew from the coalition in early 2008, Prodi lost a vote of confidence in the Senate, forcing his resignation.

The parliament was dissolved following unsuccessful talks to form an interim government, and elections were held in April 2008. The center-right alliance of former prime minister Berlusconi won commanding majorities in both houses of parliament, and Berlusconi became prime minister a third time.

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