Italy - Country history and economic development

1861. Italy is unified after decades of struggle against foreign occupation. The king of Piedmont becomes king of Italy.

1870. Radical land reform takes place, intended to benefit the peasant workers, but few profit from the reforms, and living conditions for farmers decline.

1880s. Prime Minister Giolitti embraces protectionism and places high tariffs on a number of agricultural and industrial products to defend the national sectors. The policy backfires, access to foreign markets collapses, and a tariff war with France ensues.

1890s. The tariff war with France ends. The economy begins to develop, but many leave the country in search of a better life. The United States and South America are the preferred destinations.

1899. Giovanni Agnelli founds FIAT in Turin.

1915. Italy joins the Allies and fights against Germany and Austro-Hungary in World War I (1914-18).

1922. In the wake of enormous postwar political and economic problems, Benito Mussolini's fascist movement comes to power. Mussolini is appointed prime minister and radically changes the country.

1925. Mussolini completes his design of transforming Italy into a fascist dictatorship. He reshapes the economy to focus on agricultural self-sufficiency, a strong industrial sector and a rapid military build-up. The economy is mixed: private companies co-exist with many state-owned companies.

1936. Italy enters the colonial race and invades Somalia, which remains an Italian colony until the end of World War II.

1939-45. Italy enters World War II as an ally of Nazi Germany in 1940. With the downfall of Mussolini in 1943, however, Italy switches its allegiance to the Allies.

1946. Following a national referendum, King Victor Emmanuel III abdicates, and Italy becomes a republic. A government of national unity is formed to tackle the country's problems.

1952. Italy becomes a founding member of the European Coal and Steel Community with Germany, France, Belgium, the Netherlands and Luxembourg.

1957. Italy becomes a founding member of the European Economic Community, the predecessor to the European Union. The Italian "economic miracle" begins through a combination of free market principles and heavy government intervention.

1963. The Socialist Party abandons its leftist stance and joins the Christian Democrat government. This coalition holds power until 1994.

1968-69. The country is shaken by a series of strikes and demonstrations. Workers and students demand the improvement of working and living conditions. The government meets many demands, and a more modern welfare state is established.

1973. The first oil crisis slows economic growth but does not stop it.

1977. The economy grinds to a sudden halt. Political crisis and stagflation lead to the formation of a government of national unity, as left-and right-wing terrorism spreads.

1980. Rationalization and privatization commence and continue throughout the decade, with private companies becoming dominant.

1984. The beginning of a new economic miracle. Low oil prices, technological innovations, and cheap labor drive the Italian economy forward. However, only the northern regions benefit from this growth.

1992. The old political class is swept away by corruption scandals. The new government embraces neo-liberal policies based on massive budgetary cuts, privatization, and the promotion of worker flexibility. The lira is de-valued to boost exports. The policy succeeds, and Italy exports more than it imports. Italy signs the Maastricht Treaty, which provides for further European economic integration. Among the measures to which Italy subscribes is participation in the European Monetary Union.

1994. The center-right coalition led by media magnate Silvio Berlusconi wins the elections but remains in power only 7 months. A temporary government led by technocrats replaces it.

1996. The center-left coalition wins the elections and continues with economic liberalization.

1999. Italy qualifies for monetary union with 11 other EU countries and plans for the introduction of a single currency, the euro.

2001. A center-right coalition led by Silvio Berlusconi gains control of the government.

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