Mussolini

Italian economy during the fascist period

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  • Created by: elena
  • Created on: 04-03-12 12:09

Mussolini-Quota Novanta

  • revaluation of the lira from 150 lira to 90 lira against British pound sterling
  • tariffs introduced by the state were intended to protect the new value of the lira and to favour sectors of the economy from foreign competition

MOTIVES POLITICAL- strong lira=strong Italy

TURNIG POINT IN ECONOMIC POLICY-(free market was abandoned and state intervened to regulate economy)

EFFECTS OF REVALUATION

  • Cheap imports benefited heavy industries which relied on raw materials
  • these industries provided the basis for an expanded rearmanent economy therefore supporting the "active foreign policy
  • tariffs on undesiderable imports kept their price high reducing their demand
  • over valuation od lira required fascist propaganda to convince workers of the need to cut wages in order to bring them in line with the new currency value
  • as a result wages fell more than prices and so living standards lowered considerably
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Mussolini- Depression early 1930s

During the depression

  •  the bancks with too much money tied up in long term loans were hit badly
  • through the Istituto Mobiliare Milano (IMI 1931) and the Institute for Industrial Reaconstruction (IRI1933)the government recued the banks and industries
  • banks that survived the crisis were prevented for long term lending, which became the responsability of stage agencies lile the IRI or IMI
  • the "revolution in italian finance saved many small firms and individuals from ruin and was quoted approvingly

After the depression

  • the government continued an active economic role through the ownership of businesses as well as through trade policies and import duties
  • economy remained in private ownership and the government worked alongside and in suppoert of large private firms
  • many of the shares obtained by the IRI were later sold in order to offset organisation's costs
  • by 1939 the IRI had built a dominatn interest in some of the country's largest enterprises
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