Italian economic miracle
Encyclopedia
The Italian economic miracle (Italian
: il miracolo economico) is the name often used by historians, economists and mass media to designate the prolonged period of sustained economic growth in Italy
comprised between the end of World War II
and the late 1960s, and in particular the years 1950-63. This phase of Italian history represented not only a cornerstone in the economic and social development of the country, that was transformed from a poor, mainly rural nation into a major industrial power, but also a period of exceptional flowering in arts and culture. As summed up by one historian, by the end of the Seventies,
“Social security coverage had been made comprehensive and relatively generous. The material standard of living had vastly improved for the great majority of the population."
The period coincided with the international post–World War II economic expansion.
After the end of World War II
, Italy was in rubble and occupied by foreign armies, like Germany
and other Axis powers
, a condition that worsened the chronic development gap towards the more advanced European economies. However, the new geopolitical logic of the Cold War
made possible that the former enemy Italy, a hinge-country between Western Europe
and the Mediterranean, and now a new, fragile democracy threatened by the proximity of the Iron Curtain
and the presence of a strong Communist party
, was considered by the USA as an important ally for the Free World
, and therefore admitted to the generous aids provided by the Marshall Plan
, receiving $ 1,204 million from 1947 to 1951. The end of the Plan, that could have stopped the recovery, coincided with the crucial point of the Korea War (1950–1953), whose demand for metal and other manufactured products was a further stimulus to the growth of every kind of industry in Italy. In addition, the creation in 1957 of the European Common Market, of which Italy was among the founder members, provided more investments and eased exports.
These highly favorable historical backgrounds, combined with the presence of a large and cheap stock of labour force, laid the foundations of a spectacular economic growth, that lasted almost uninterrupted until the "Hot Autumn
's" massive strikes and social unrest of 1969-70, that combined with the later 1973 oil crisis
, put an abrupt end to the prolonged boom. It has been calculated that the Italian economy experienced an average rate of growth of GDP of 5.8% per year between 1951–63, and 5.0% per year between 1964-73. Italian rates of growth were second only, but very close, to the German
rates, in Europe, and among the OEEC countries only Japan
had been doing better. In 1963, US President
John F. Kennedy
personally praised Italy's extraordinary economic growth at an official dinner with Italian President
Antonio Segni
in Rome
, stating that "the growth of [...] nation's economy, industry, and living standards in the postwar years has truly been phenomenal. A nation once literally in ruins, beset by heavy unemployment and inflation, has expanded its output and assets, stabilized its costs and currency, and created new jobs and new industries at a rate unmatched in the Western world".
Italian language
Italian is a Romance language spoken mainly in Europe: Italy, Switzerland, San Marino, Vatican City, by minorities in Malta, Monaco, Croatia, Slovenia, France, Libya, Eritrea, and Somalia, and by immigrant communities in the Americas and Australia...
: il miracolo economico) is the name often used by historians, economists and mass media to designate the prolonged period of sustained economic growth in Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...
comprised between the end of World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
and the late 1960s, and in particular the years 1950-63. This phase of Italian history represented not only a cornerstone in the economic and social development of the country, that was transformed from a poor, mainly rural nation into a major industrial power, but also a period of exceptional flowering in arts and culture. As summed up by one historian, by the end of the Seventies,
“Social security coverage had been made comprehensive and relatively generous. The material standard of living had vastly improved for the great majority of the population."
The period coincided with the international post–World War II economic expansion.
History
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
, Italy was in rubble and occupied by foreign armies, like Germany
Nazi Germany
Nazi Germany , also known as the Third Reich , but officially called German Reich from 1933 to 1943 and Greater German Reich from 26 June 1943 onward, is the name commonly used to refer to the state of Germany from 1933 to 1945, when it was a totalitarian dictatorship ruled by...
and other Axis powers
Axis Powers
The Axis powers , also known as the Axis alliance, Axis nations, Axis countries, or just the Axis, was an alignment of great powers during the mid-20th century that fought World War II against the Allies. It began in 1936 with treaties of friendship between Germany and Italy and between Germany and...
, a condition that worsened the chronic development gap towards the more advanced European economies. However, the new geopolitical logic of the Cold War
Cold War
The Cold War was the continuing state from roughly 1946 to 1991 of political conflict, military tension, proxy wars, and economic competition between the Communist World—primarily the Soviet Union and its satellite states and allies—and the powers of the Western world, primarily the United States...
made possible that the former enemy Italy, a hinge-country between Western Europe
Western Europe
Western Europe is a loose term for the collection of countries in the western most region of the European continents, though this definition is context-dependent and carries cultural and political connotations. One definition describes Western Europe as a geographic entity—the region lying in the...
and the Mediterranean, and now a new, fragile democracy threatened by the proximity of the Iron Curtain
Iron Curtain
The concept of the Iron Curtain symbolized the ideological fighting and physical boundary dividing Europe into two separate areas from the end of World War II in 1945 until the end of the Cold War in 1989...
and the presence of a strong Communist party
Italian Communist Party
The Italian Communist Party was a communist political party in Italy.The PCI was founded as Communist Party of Italy on 21 January 1921 in Livorno, by seceding from the Italian Socialist Party . Amadeo Bordiga and Antonio Gramsci led the split. Outlawed during the Fascist regime, the party played...
, was considered by the USA as an important ally for the Free World
Free World
The Free World is a Cold War-era term often used to describe states not under the rule of the Soviet Union, its Eastern European allies, China, Vietnam, Cuba, and other communist nations. The term often referred to states such as the United States, Canada, and Western European states such as the...
, and therefore admitted to the generous aids provided by the Marshall Plan
Marshall Plan
The Marshall Plan was the large-scale American program to aid Europe where the United States gave monetary support to help rebuild European economies after the end of World War II in order to combat the spread of Soviet communism. The plan was in operation for four years beginning in April 1948...
, receiving $ 1,204 million from 1947 to 1951. The end of the Plan, that could have stopped the recovery, coincided with the crucial point of the Korea War (1950–1953), whose demand for metal and other manufactured products was a further stimulus to the growth of every kind of industry in Italy. In addition, the creation in 1957 of the European Common Market, of which Italy was among the founder members, provided more investments and eased exports.
These highly favorable historical backgrounds, combined with the presence of a large and cheap stock of labour force, laid the foundations of a spectacular economic growth, that lasted almost uninterrupted until the "Hot Autumn
Hot Autumn
The Hot Autumn of 1969–1970 was a massive series of strikes in the factories and industrial centers of Northern Italy, during which workers demanded better pay and better conditions. Between 1969-1970 there were over 440 million hours of strikes alone...
's" massive strikes and social unrest of 1969-70, that combined with the later 1973 oil crisis
1973 oil crisis
The 1973 oil crisis started in October 1973, when the members of Organization of Arab Petroleum Exporting Countries or the OAPEC proclaimed an oil embargo. This was "in response to the U.S. decision to re-supply the Israeli military" during the Yom Kippur war. It lasted until March 1974. With the...
, put an abrupt end to the prolonged boom. It has been calculated that the Italian economy experienced an average rate of growth of GDP of 5.8% per year between 1951–63, and 5.0% per year between 1964-73. Italian rates of growth were second only, but very close, to the German
West Germany
West Germany is the common English, but not official, name for the Federal Republic of Germany or FRG in the period between its creation in May 1949 to German reunification on 3 October 1990....
rates, in Europe, and among the OEEC countries only Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
had been doing better. In 1963, US President
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
John F. Kennedy
John F. Kennedy
John Fitzgerald "Jack" Kennedy , often referred to by his initials JFK, was the 35th President of the United States, serving from 1961 until his assassination in 1963....
personally praised Italy's extraordinary economic growth at an official dinner with Italian President
President of the Italian Republic
The President of the Italian Republic is the head of state of Italy and, as such, is intended to represent national unity and guarantee that Italian politics comply with the Constitution. The president's term of office lasts for seven years....
Antonio Segni
Antonio Segni
Antonio Segni was an Italian politician who was the 35th Prime Minister of Italy , and the fourth President of the Italian Republic from 1962 to 1964...
in Rome
Rome
Rome is the capital of Italy and the country's largest and most populated city and comune, with over 2.7 million residents in . The city is located in the central-western portion of the Italian Peninsula, on the Tiber River within the Lazio region of Italy.Rome's history spans two and a half...
, stating that "the growth of [...] nation's economy, industry, and living standards in the postwar years has truly been phenomenal. A nation once literally in ruins, beset by heavy unemployment and inflation, has expanded its output and assets, stabilized its costs and currency, and created new jobs and new industries at a rate unmatched in the Western world".