1974 starts with feeling of apprehension. The country is in the grip of an economic crisis and paralysed by the austerity measures brought in in the previous year. It isn’t possible to use your own vehicle on Sundays. The penalty for doing so is a fine of 1 million Lira. Italians find themselves squeezed onto public transport or on their bicycles on Sundays. Television transmissions finish at 10.45 pm and cinemas at 10.00 pm. There are limits imposed on domestic heating and lighting. There are queues at the shops for simple products such as sugar. More than this, they have to endure the politician’s “patriotic calls” for a spirit of sacrifice! The irony was that Italy was manufacturing cars, but didn’t have any petrol! [1]
“Ban on travel by car on holidays. TV, bars and public offices closed.”
The oil embargo, which began in October 1973 resulted in a four-fold increase in the price of oil in 1974. The embargo proved more damaging to Italy than the other major industrial countries. Italy is heavily dependent on raw material imports; nearly all its oil is imported and about 80 per cent of its total energy consumption.
Unfortunately, speculators sprang up that profited from the crisis increasing prices at the petrol pumps even further. The scandal uncovered implicated politicians, oil companies, and financiers.
Bologna: Austerity, winter 1973-74
Kidnappings continued with the Red Brigades kidnapping the magistrate Mario Sossi. The Red Brigades were an extreme left-wing terrorist revolutionaries who promoted and carried out an armed fight for communism. A hostage exchange brought about his release just over a month later. The Red Brigades weren’t the only group attacking at the heart of the state. On 28th May a bomb exploded in Piazza della Loggia in Brescia killing 8 and injuring 101 people. The New Order, a neofascist group claimed responsiblity. Another bomb exploded on 4th August on a train near Bologna. This time, the Black Order fascists claimed responsibility.
The country’s deficit reached nearly $8 billion which greatly accelerated the inflation rate, to a whopping 20%. Some goods like meat and sugar rose by up to 100%. The central bank intervened in the exchange market to support the lira. Italy borrowed from the IMF, the European Community and the Bundesbank a total of $5.9 billion. A restrictive policy was imposed. For example, an Italian tourist could take only a limited amount of money abroad to stop capital from leaving the country. The permitted amount was just enough for a stay of a couple of days . GDP and industrial production fell sharply during this time, Fiat put 73,000 workers on unemployment benefit towards the end of the year. All this provoked a political crisis [2].
Between February 1972 and the government formed by Aldo Moro in November, there had been six successive governments, three different governments in 1974 alone, each a different coalition and each without the slightest idea how to tackle the crisis.
In July, the monopoly of the state broadcaster RAI was ended and in September, the cable TV company Telemilano (in Milan) started broadcasting in the Milan area. The owner of this TV station was Silvio Berlusconi [3].
References
[1] Storiologia website 1974 (in Italian)
[2] The Italian Economic Crisis of the 1970s (Raymond Lubitz)
[3] Silvio Berlusconi (in Italian)
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