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To the centerist governments led by the Christian Democrats from the advent of the Republic, there followed
at the beginning of the 1960s coalitions that were increasingly open to collaboration with the parties of the left.
In particular with the Socialist Party after it had gradually loosened its close ties with the Communist Party.
After the nationalization of the electrical industry in 1962 the socialists became part of the government.
Meanwhile, the policies of social reform combined with the imposition of taxation on investment returns and ground
for building required to finance the provision of public housing, imple mented by the governments presided over
by Amintore Fanfani, provoked a loss of confidence. There was a general uncertainty on the national political scene
in the face of a fundamental choice in economic policy, leading to a fall in investments and a critical contraction
in share dealings. Thus came to an end in 1963-64 the long period of national economic growth that had carried
Italy into the group of most industrialized nations.
Following this crisis, there occurred a new phase of economic expansion (1966-69), though at a slower rate. An
economic plan was drawn up containing territorial implications requiring the institution of regions with autonomous
powers of administration, legislation and management. In particular, special autonomous status, which was already
in force, was conferred on the five peripheral regions of Valle d'Aosta, Trentino-Alto Adige, Friuli-Venezia Giulia,
Sardinia and Sicily.
From 1968, in line with protest movements in other European countries such as France and Germany and while, especially
among the young, there was a growth in emotional participation condemning violent local conflicts in the under-developed
regions of the third world, Italy also began to be involved in student and trade union agitation (1968-69). These
increased in frequency and unfortunately produced episodes of collective violence.
They did however obtain considerable standard and economic concessions that all too soon reflected negatively on
a national economy that was already weakened by a high level of consumption and a consequent imbalance in international
trade. Thus, when in 1973 there was the energy crisis (provoked by yet another Arab-Israel conflict) that threw
the world economy into confusion, Italy found herself in a particularly difficult situation. She was forced to
absorb the grave consequences of a rate of inflation that even reached 20% per annum, while the numbers of unemployed
grew to over two million, due to drastic cut-backs and failure of the weakest firms. The country's situation was
aggravated considerably by the phenomenon of political and ideological terrorism, which was often allied with organized
crime (the assassination of the Christian Democrat statesman Aldo Moro in 1978 formed the most significant episode).
Finally, during the first half of the 1980s there were national coalition governments (supported by the parties
of the `constitutional arc') who weathered the political emergency and applied severe measures of economic austerity
to contain consumption. The last of these governments being headed for the first time by members of the `lay' parties
such as the republican Spadolini and the socialist Craxi. The national economic situation has registered a net
improvement, with inflation falling to acceptable levels, a growth in investments (favoured by a reduction in trade
union conflicts) and an improvement in the value of the lire, all within a climate of renewed faith in the capacity
of the whole nation to develop.